Workforce planning: What it is and why it matters

In Garnet River’s home state of New York, we have a workforce in decline. From 2011 to 2021, the workforce shrank 1 percent while the rest of the country experienced a 5.1 percent increase (source: NYS Comptroller). Covid-19 accelerated this trend. And while 2022 brought signs of life, the top overall challenges remain.  Chief among them: the most in-demand skills and high-growth occupations are the toughest to hire for.

This challenge is not unique to New York. Skilled workers are in short supply, and competition to land and retain them is high. This makes workforce planning critical—across New York and beyond.

What is workforce planning?

Workforce planning is a proactive approach to identify and meet an organization’s current and future talent requirements. It aligns talent needs with business objectives, laying a foundation for growth, adaptability, and long-term success.

Why workforce planning matters

Workforce planning is important because it allows organizations to efficiently allocate their resources. By analyzing and forecasting the demand and supply of human resources, organizations can optimize workforce utilization and productivity while minimizing costs. A well-executed workforce plan considers factors such as employee skills, competencies, succession planning, and potential skills gaps, allowing organizations to make informed decisions about recruitment, training, and talent development.

Here are four additional ways it benefits organizations.

• Alignment. Workforce planning serves as a strategic compass, ensuring the right people are in the right roles, possessing the necessary skills and capabilities to achieve organizational objectives. By understanding future talent needs and anticipated skill requirements, organizations can proactively identify skill gaps and develop strategies to bridge them. This strategic alignment not only enhances operational efficiency but also fosters innovation and agility in an ever-evolving marketplace.
• Adaptability. Workforce planning enables organizations to respond effectively to external disruptions such as economic shifts, technological advancements, or changes in consumer preferences. By having a clear understanding of current and future talent needs, organizations can quickly identify areas of vulnerability and take proactive measures to address them. This flexibility allows organizations to capitalize on emerging opportunities while minimizing the risks associated with unforeseen challenges.

• Sustainability. As a standalone, hiring is challenging. Retaining and developing talent raises the difficulty a level. By identifying high-potential employees and providing them with growth opportunities and targeted training, organizations can cultivate a pipeline of talent to fill key positions. This approach not only reduces the risk of leadership gaps but also boosts employee engagement, motivation, and retention.

• Engagement. When people perceive their skills and aspirations are valued and aligned with organizational goals, they are more likely to be committed and motivated. By investing in training and development programs that address employees’ professional growth and career aspirations, organizations can nurture a culture of continuous learning and provide a clear path for advancement. Such initiatives increase job satisfaction, reduce turnover, and attract top talent, contributing to a positive and productive work environment.

How to make workforce planning a strategic priority

Traditionally (and mistakenly) many organizational leaders viewed workforce planning as an administrative process. While many leaders have more recently gotten onboard, it still takes a concerted effort to make it a strategic priority. Here are three steps you can take to move it forward:

1. Align planning initiatives with the overall business strategy. This helps create a shared vision in which workforce planning plays a vital role to organizational success.
2. Secure leadership buy-in. Include executives in discussions about talent management, succession planning, and the competitive advantages of having a skilled and adaptable workforce.
3. Analyze and plan. Assess your current workforce and identify any skill gaps or shortages that can block the achievement of organizational goals. Look at other data points, such as demographic trends, employee turnover rates, performance metrics, etc. This information can lead to the establishment of a structured and systemic process. Also, create a timeline and milestones, schedule regular reviews and updates to adapt to changing business needs, and promote collaboration and communication across departments.

Do these three things well, and a strong case will be made for investing in talent and integrating workforce planning across all levels of the organization. And while these things are universal, in a state like New York, where there are economic and demographic challenges adding more pressure to businesses, they are critical.