HR Basics is a series of short courses, designed to highlight what you need to know about a particular human resource management topic. In today’s HR Basics, we explore workforce planning, how to identify current workforce issues, forecast future needs and implement a plan to ensure those needs are met. Workforce planning is the process of making sure that individuals with the right skills are where they need to be, at the right time, to meet a firm’s current and future need. In many ways, workforce planning is an ongoing balancing act. Companies must balance the demand for labor with the available supply of labor.
Workforce planning is dependent on labor supply and demand. Labor demand refers to the number and types of employees the company needs to meet its current and future strategic objectives. Labor supply refers to the availability of current or potential employees to perform a company’s jobs.
Workforce planning requires attention on external workface availability, and the characteristics of the internal workforce, which are impacted by a number of factors. Factors such as interest rates, inflation, and economic decline or growth affect the availability of workers and should be considered when organizational and HR plans and objectives are formulated.
The second step in the workforce planning process is figuring out where you want to go, aligning human resource strategy with workforce planning issues and goals. To some extent, managers can control internal labor factors. Managers also have to evaluate factors in the external environment over which they have less control. These factors relate to the local labor market, economic conditions, and industry trends that impact the supply and demand for goods and services.
The third step of workforce planning process is figuring our how to get there through the identification of actions and metrics. A company’s organizational culture affects the different tactics firms use to deal with labor shortages and surpluses as well as how their employees will react to those tactics.
Strategic workforce planning usually covers a three to five year forecast period, aligned to business needs and outcomes. It focuses on identifying the workforce implications, current, transition and future of business strategic objects and includes scenario planning.
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