Why is workforce planning a critical element of business success?
- Achieving organisational goals
- Improving efficiency
- Mitigating risks
- Upskilling employees
Benjamin Franklin once said, “By failing to prepare, you are preparing to fail.”
In the realm of modern business, this statement has never been more valid.
With the new year commencing, there’s never been a better time for organisations to pause and pivot. While it’s a time to reflect on the year that was, it’s also a time to recalibrate for the year ahead.
For future-focused business leaders, staying agile isn’t an option – it’s a necessity. As many leaders have found, long-term organisational success doesn’t happen by accident. In many cases, it stems from tackling uncertainty head-on through strategic workforce planning.
If you’ve ever wondered, ‘What is workforce planning?’ read on.
In this article, we’ll discover the ins and outs of workforce planning – what it is, why it’s crucial and what the consequences could be if you neglect this piece of the planning puzzle.
What is workforce planning, and why is it crucial?
Elaine Lam, a workplace expert with 17 years of experience and managing director at Robert Half Hong Kong, says workforce planning is a strategic process of anticipating future workforce needs and developing plans to meet those needs.
She says, “If you want to align your workforce with your business goals, you need to ensure that you have the right people with the right skills in the right roles at the right time. Workforce planning encompasses this process of analysing, forecasting and planning to help identify the gaps.”
“I always advise managers and talent acquisition professionals not to neglect workforce planning. It’s what helps modern businesses navigate change, respond to market shifts and optimise their human capital. You’re missing a trick if you fail to harness the power of this process – I cannot overstate that,” Elaine says.
“There is a noticeable link between workforce planning and the achievement of business objectives. Of course, you want to identify your destination, but you need to map out the journey to get there. I’ve never met a manager who regrets carving out time for workforce planning.”
Here's why workforce planning is a critical element of business success:
Achieving organisational goals – It enables businesses to forecast the staffing requirements that will make their goals a reality.
Improving efficiency – It allows for smarter hiring decisions, better resource allocation and more cost-effective operations.
Mitigating risks – It provides greater visibility to anticipate potential challenges before they become severe (i.e., high turnover, retirements or shifts in skill requirements).
Upskilling employees – It clarifies areas for employee development to cultivate a more engaged and capable team.
The ‘quiet time’ advantage
Wondering how to kick 2025 off with a bang?
Workforce planning is essential if you want to get the new year off to a strong start.
While December or early in the year may seem like a time for the workplace to “wind down” or “ease into it”, Elaine says the opposite is true.
“Aside from ‘what is workforce planning?’, one of the common questions I get asked is, ‘when should I do it?’ Managers are often surprised when I suggest December, January or February. Sure, it’s typically a slower period, but it’s the perfect time to sit down, be strategic and make some proactive adjustments.”
Let’s take a look at why December is ideal for workforce planning:
It aligns with annual planning cycles – With budgets and forecasts being finalised for the year ahead, it’s wise to ensure that staffing requirements and resource allocations align.
It helps optimise talent availability – Many professionals reassess their career goals at the end of the year. Planning ahead can allow you to strike while the iron is hot and tap into the talent market before your competitors.
It helps address skill gaps – Assess your team’s performance and identify where weaknesses and opportunities lie. Plan to upskill current employees or engage strategic hires to start the year strong.
Common challenges
There’s no disputing that workplace planning is critical to organisational success. If you want your talent strategy to align with your wider business goals, it’s not something to neglect.
That said, it’s not without its hurdles.
If you find yourself asking, ‘What is workforce planning?’, be sure to understand the associated challenges.
Below are some common examples:
Economic uncertainty – Fluctuating economic conditions, industry trends or consumer habits can make it difficult to forecast workforce needs. Inaccuracies can lead to overstaffing or understaffing.
Technological advancements – Technology is evolving at a rapid speed, and the skills needed this year might not be relevant next year. Organisations must keep abreast of tech changes or face the challenge of keeping up with ever-changing skill gaps.
Employee retention – While industries are becoming increasingly specialised, finding employees with the right expertise is becoming increasingly challenging. The war for top talent is intensifying, and talent shortages can make it difficult to fill critical positions.
Data accuracy – Workforce planning cannot be optimised without accurate data. Poor quality data relating to business metrics, employee performance and future needs can compromise planning decisions.
Elaine says business leaders should not let the challenges deter them from strategic workforce planning. She says, “While there are certainly some challenges involved, the consequences of poor workforce planning (or no workforce planning) are far greater.”
“Organisations who neglect workforce planning are set to endure a range of consequences which could seriously hamper other business efforts. Without a clear strategy, they face major skill gaps, talent shortages, increased costs and reduced productivity. From a long-term perspective, these businesses will risk losing their competitive edge and may struggle to adapt to changes in their industry,” says Elaine.
Best practices
Want to maximise your workforce planning efforts this year?
Be sure to take note of our tips and tricks for successful workforce planning:
Leverage data and technology – Employ quality analytics and workforce management tools to make informed decisions while pre-empting your talent needs.
Forecast future needs – Take the time to plan for various scenarios. Consider your organisation’s growth plans, industry trends and tech developments to predict future workforce requirements.
Invest in employee development – Engage your employees to understand where strengths and weaknesses lie. Focus on upskilling them to bridge skill gaps and address your future talent needs.
Ensure your strategy is flexible – Workforce planning is not a ‘one-time’ project. To maximise your efforts, keep your strategy adaptable – revisit and adjust your plans periodically to stay on top of business and market changes.
There’s a buzz around the concept of workforce planning in Hong Kong for good reason. As the modern-day workplace continues to evolve, workforce planning has become instrumental to staying agile and forward-thinking. Leaders who invest time in this strategic measure are better poised to thrive in the ever-changing world of business. With the new year in full swing, it’s the perfect time to make a plan and bolster your business capabilities.
Frequently Asked Questions (FAQs)
What is the meaning of workforce planning?
Workforce planning is a strategic process of anticipating future workforce needs and developing plans to meet those needs.
What are the essential steps in the workforce planning process?
Analyse current workforce
Forecast future work needs based on business goals
Identify gaps/shortages/surpluses
Create plan to address these gaps through hiring, training or restructuring
Track progress
How does workforce planning contribute to organisational growth?
Workforce planning encompasses the process of analysing, forecasting and planning to help identify talent gaps.
It contributes to organisational growth by empowering organisations to align their workforce with their business goals, ensuring they have the right people with the right skills in the right roles at the right time.
How do I forecast future workforce needs?
Leverage data and technology – Quality analytics and workforce management tools.
Forecast future needs – Consider business growth plans, industry trends and tech developments.
Invest in employee development – Identify where strengths and weaknesses lie.
Ensure your strategy is flexible – Revisit and adjust plans periodically to stay on top of business and market changes.
How can data analytics be used in workforce planning?
Data analytics help to forecast future talent needs by assessing trends in employee performance, turnover, and market demand. Data analytics allow business leaders to make informed decisions to identify skill gaps and maximise hiring strategies.
