How to reduce HR costs with Workforce Planning

In 2020, Insight222 surveyed 60 people analytics teams to evaluate the HR industry’s state and its growth during the pandemic. As a result, the survey revealed that more than 60% of participants had a goal to develop their people analytics expertise.  Workforce planning is an essential element of people analytics. This field combines analytics, data, and continuous workforce assessment to predict workforce demand, skill gaps, and training activities in the long run.

Here’s how HR executives benefit from workforce planning initiatives:

• Get a helicopter view of the workforce skillset.
• Identify skill gaps and room for improvement.
• Shift a focus from intuition-based to data-driven decision-making.

On top of that, the smooth-running process of workforce planning helps optimize HR costs. In this blog, we’ll review three ways as to how workforce planning helps spend your company’s budget wisely.

Workforce demand planning

“Time and money are your scarcest resources. You want to make sure you’re allocating them in the highest-impact areas. Data reveals impact, and with data, you can bring more science to your decisions.” - Matt Trifiro, CMO Vapor IO

Workforce planning is a continuous loop-like process that includes several key stages: coming up with business objectives, workforce analysis, implementing actions to fix the detected bottlenecks, and recap of the results. Thanks to thorough research at all stages, businesses get accurate data on workforce supply (headcount, available skills, promotion plans, etc.) and workforce demand like skills and competencies required to fulfil the business goals.

Efficient & effective workforce demand planning also helps organizations keep just the right number of employees and avoid redundancy in the future.

Optimization of the hiring strategy with HRTech solutions

Career Builder calculated the cost of a bad hire and revealed that the loss might reach up to $14.900 per employee. This figure includes costs on recruiting, training, and retention. This pitiful situation is a result of hiring mistakes such as: 

• Lack of diversity: 41% of HR managers say they’re too busy to implement diversity, equity, and inclusion (DEI) initiatives. However, such an approach leads to a narrow talent pool and an outside perspective on routine workflows.
• Lack of strategic thinking: It’s common to hire promising candidates even if there aren’t any open projects or vacancies for them. As a result, hires land on a bench and feel frustrated since they can’t put their skills to practice. Or sometimes, recruiters struggle to close the vacancy with any suitable candidate, which leads to a high turnover rate over the long term.
• Ignoring the candidate’s potential: Did you know that only 30% of high-performing employees are A-players (future-proof employees)? That means that your hiring strategy must focus on long-term business goals to get suitable candidates on board.

So, how does Strategic Workforce Planning help avoid common hiring mistakes? Data like current talent gaps, future job profiles, talent market trends, and availability of talent in your area helps in forming an efficient talent strategy. You’ll be able to make informed decisions on candidate sourcing and expand your talent pool, optimize onboarding and training time, and turn candidates into loyal employees.

Action plan for unforeseen events

In 2020, after the COVID-19 outbreak, companies that had not prepared their workforce for remote work and new working rules struggled to change their business processes. Companies that implement strategic workforce planning are much better prepared for the uncertain future.

• First, with workforce planning in place, organizations pinpoint integral job roles and skills for business success. As a result, these insights help organizations allocate their investments wisely.
• Second, companies can identify retraining and upskilling opportunities to stay flexible in a quickly changing business environment. Organizations can also predict the skills that’ll go out of date or vice versa, become highly needed.
• Finally, workforce planning aids in strategic decision making and answers questions like: “Do we allocate talent in-house or outsource the essential skills?”.

smartPlan 

Here at HRForecast, we believe that HR can take complete control of their workforce with people analytics and actionable insights at hand. We created smart Plan to help HR executives and business owners build the future proof workforce, forecast the talent supply and demand and identify critical skills gap. Our customers use smartPlan to stimulate unforeseeable events, develop solution scenarios, right-size the headcount, align business goals with workforce supply and more.