How Strategic Workforce Planning Can Help Scale Your Small Business

If you’re thinking about hiring new employees, then you’re probably wondering what strategic workforce planning is. Here’s a look at everything you need to know about the process, including a seven-step guide to effective workforce planning.

What is strategic workforce planning?

Strategic workforce planning is when businesses ensure that they have the right people to staff the right positions at opportune times for business growth. Business’s needs are always changing, and forecasting what roles you will need filled months in advance can help you avoid bottlenecks.

The goal is to ensure that you’re not facing overstaffing (too many people not driving enough value) or understaffing (running a business that requires more hands on deck). It’s thinking about what happened last week, today, and next month. Your current workforce can change at any moment.

Where do employees fit into the strategic workforce planning process?

Employees need to find jobs that meet their needs at the right time as well. It’s important for businesses  to have a plan for negotiating with potential employees, especially for talented people with hard-to-find skills.

For employees, this means planning ahead financially for costs such as sign on bonuses, technology expenses, and other benefits. 

Who handles the strategic workforce management process?

In general, HR (including Talent Management and Talent Acquisition) are responsible for ensuring that each business unit has their staffing needs met in a timely manner. While finance and operations might determine what roles are necessary, HR is responsible for creating a pipeline of talent to fill open seats.

The HR department is a key player, but the CEO, COO, CFO, department heads, board members, and other stakeholders can also help with developing the strategy.

What is a strategic workforce planning model?

In an ideal world, businesses would post job openings, find the best candidate, extend a job offer, and begin onboarding them right away. In practice, the shortage of top talent and the crunch for resources means that businesses need to plan for alternative hiring approaches.

To better understand the current economic climate and the business’s unique situation, HR teams use one or more of the following models:

• Supply model (determine who is available to work)

• Demand model (understand what is needed for staffing)

• Gap analysis (understand the difference between supply and demand, including surpluses and shortages)

• Solution analysis (create a plan that addresses gaps in current and future hiring needs through recruiting, training, contingent staff, third-party business partners, hiring abroad, and other strategies)

Top 7 tips for creating a strategic workforce plan

Every industry is different, so you will want to work with experts in your industry to identify gaps and future needs, as well as stage a plan to evaluate your workforce’s performance. You need to consider your market(s), products, services, competition, and other factors. Workforce planning enables you to build a business that will last.

1. Determine your remote work policy

While many companies, especially startups, started embracing remote work before 2020, now it’s almost impossible to imagine a business world without it.

For businesses looking to hire the best talent, requiring people to relocate is not just expensive. It’s also a major downside for many prospective employees and one of the most important factors new employees take into consideration while job hunting.

If you’re open to hiring employees remotely, on the other hand, you will have access to a wider range of talent. The main challenges will be ensuring that you onboard and pay them compliantly (especially if they are in another country) and ensuring that they have access to company technology, such as company-purchased work laptops.

2. Set your hiring goals with human resources

You will need to identify current and future roles that are required to make your business a success. This might also mean phasing out roles that are no longer generating value for the company, or planning to build out your marketing function if you haven’t done so before.

The challenge is striking a balance between immediate needs and long-term staffing roadmaps, especially as employees find new jobs or retire. Hiring for quality, not just quantity, will lead to more long-term success.

3. Solve for skill gaps with contractors

Even businesses with a large staff work with consultants, freelancers, contractors, agencies, or other experts that can close the gap on crucial skills.

While the great resignation means that many employees have left their full-time jobs, the rise of the gig economy suggests that people are looking for new opportunities for career growth.

4. Establish business-wide goals

Are you looking to double revenue? Expand to a new country? Launch products in a new market? Do you need to set a specific goal for your industry? Strategic workforce planning means asking the right questions.

Determining your staffing needs depends on how quickly you want to scale up your organization. 

5. Consider the data

Working with finance and operations, HR should invest in business analytics tech to better understand how the staff they are hiring can help them meet long-term goals. This means understanding your KPI benchmarks and learning how to measure them successfully.

You will also want to measure and analyze employee retention and turnover, revenue per employee, and budget by function to better attract and retain top talent.

6. Re-skill your workforce

Teaching your team new skills helps both the business and employees. It’s beneficial for employers and employees alike to continually seek out and learn the newest tech. Finding ways to teach staffers new in-demand skills can benefit your business in the long run. And many employees are eager to learn skills and capabilities that will progress their careers, even members of the aging workforce.

7. Scale your organization

Some organizations would simply fall apart if they lost just a handful of mission-critical employees. As you build out your strategic workforce plan, training and hiring people who can make the organization less dependent on individual people can keep your business running, even if key players leave.

The advantages of building a workforce planning strategy are clear. It  takes  upfront work, but in the long-term, it can help to eliminate surprises, especially if your business experiences major changes, such as downsizing, mergers, acquisitions, and international expansion.

Justworks Can Help Manage US Employees

Choosing the right payroll provider to help you expand your business in the US can be a game changer. It’s hard to know where to start when hiring in the US. With Justworks’ PEO, we ease the process and ensure compliance with individual state laws. At Justworks, we have HR experts to help small businesses manage remote employees. 

Learn more about how you can expand your international business through Justworks, and get started today.