What does it take to predict, find and maintain a workforce that serve your business? Simon Kent, Head of Content, The HR World, discusses the art of workforce planning at a complex and challenging time.
The forces impacting on how to create and manage an effective workforce are numerous and diverse. From AI to demographics, from global events to market changes there is little for organisations to hold on to when it comes to making certain plans. And yet planning is exactly what HR needs to do if it is to ensure that the organisation it is part of continues to have the right people and skills it needs.
“Most organisations still treat workforce planning as forecasting,” says David Edwards, workforce strategist and author of The Strategic Workforce Planning Handbook, “and the forecast is out of date before the budget cycle it was built for has finished.”
Edwards can see the influence of Artificial intelligence here, shortening the time for which any assumption about the workforce stays true. This, he says, means leaders need clarity about the decisions in front of them more than they need just another number.
“Nobody can see ten years ahead with any confidence,” he says. “The useful question is how long it takes to act once a problem has been spotted.” The action required will vary according to need – after all, growing an experienced engineer from a graduate takes years, hiring one takes months at best, and automating a process can take a year or more. “The planning horizon for any group of roles should therefore be at least as long as the slowest option you would have to use, which for most organisations means three to five years, held as a range of possible futures and tested every few months,” he says.
“Workforce planning is becoming more challenging as organisations place greater emphasis on skills, while many talent processes have yet to adapt,” says Emma O’Dell, Skills and Capability Director, at BPP, part of Lyceum Education Group. According to her business’ research among HR and L&D decision makers in the UK, while 90% of employers say they have adopted or are trialling a skills-based approach to their workforce, many decisions around hiring, progression and talent deployment remain tied to traditional job structures. In fact, Lyceum Education Group’s latest research (UK Learning Power 100), based on insights from 2,000 UK employees, shows that only 8% of organisations have fully embedded skills into workforce strategy and decision-making.
"We can’t ignore the fact that managers neither give up their unskilled staff easily, nor accept them as solutions to problems they think require external staff.”
“A lack of skills visibility is a major obstacle to progress,” says O’Dell. “BPP’s employer research shows that more than half (53%) of employers cite limited insight into employee capabilities as a barrier, reinforcing the need for stronger skills diagnostics, workforce intelligence and data-driven decision-making. While 48% of organisations report active skills management, many are still developing the visibility and infrastructure needed to support truly skills-based decision making.”
O’’Dell also perceives a gap between strategy and execution citing research that shows that while 91% of employers discuss learning strategy at board level, only 28% of employees say their manager regularly recommends development opportunities. In other words, workforce planning priorities are not always translating into day-to-day action.
Edwards recognises that investing in skills can be an alternative to recruiting new people, but says this should be done with caution: “Developing people is often the right answer where a skill is scarce and the market is expensive, but it is one option among several, and each should be judged on time, cost, certainty, risk and how easily it can be reversed,” he says. “Training is slow, its results are uncertain, and well-trained people become attractive to other employers. We can’t ignore the fact that managers neither give up their unskilled staff easily, nor accept them as solutions to problems they think require external staff.”
Edwards also sees some issues with skills audits as a starting point for employers since carrying out a survey will only tell you what people said they could do on that day. Crucially, it gives no information about which gaps matter. “It becomes useful when it is tied to a business decision about what capability is needed and by when,” he says.
Bharat Siyani, VP of People and Culture at Breathe HR and Rotageek suggests HR should place more emphasis on internal talent mobility. “By upskilling and redeploying staff into different roles within the organisation, employers can quickly plug skills gaps without needing to look outside the business,” he suggests. “To do this, HR teams should focus on staff’s skills rather than job titles, and think laterally about what roles workers would be suited to. For example, could a talent acquisition lead with strong communication and stakeholder management skills be a good fit for a sales role?"
Siyani goes a step further by calling for the creation of strong internal talent pipelines requiring the hiring and development of junior talent. At a time when some employers are cutting back on entry-level hiring he argues employers are losing the training grounds for tomorrow’s leaders. “Employers will still need capable people to step into future roles, even if they can’t predict exactly what they’ll look like right now,” he says. “So instead of cutting junior jobs entirely, employers need to think long-term and redesign them to involve tasks AI cannot automate. This way, businesses can build a healthy internal talent pipeline that can feed senior roles.”
O’Dell senses a broader shift towards future-focused workforce planning, however. She says around 70% of organisations now prioritise planning for future skills and capabilities over a five-year horizon, rather than focusing solely on short-term headcount requirements. “The key is balancing long-term strategic direction with regular review cycles, ensuring workforce plans can adapt as business needs, technology and skills demands continue to change,” she says.
“The comparison that matters is the total cost of labour across employees, contractors and third parties."
“The most effective workforce planning now focuses on critical skills and business capabilities rather than attempting to predict every future role,” she adds.
For David Edwards, organisations need to better understand the implications of the workforce decisions they are making now and how it might play out in the future. He is particularly worried about the gap being created by cutting entry-level hiring noting: “the experienced people organisations rely on will leave over the next decade, and the consequences will arrive long after the decision-makers have moved on.” He also adds that the shift from investing in full-time employees to filling gaps with contractors, which has featured in some sectors, purely moves where the cost of people is accounted for rather than addressing the cost itself.
“The comparison that matters though is the total cost of labour across employees, contractors and third parties,” he explains. “Anyone cutting early-career recruitment to fund reskilling should remember that younger entrants tend to arrive more fluent with artificial intelligence than the experienced people it supports, and those people will leave in time.”
There are no quick fixes to attaining the workforce - and that to some extent is the issue here. It is how HR make future decisions, the data it uses to inform decisions and the way it measures the impact of those decisions that will ultimately determine if the business simply deals with the challenges it faces or thrives.
