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Everything you need to know about workforce planning and workforce modeling

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In order to align HR planning with business goals, it is essential to conduct both workforce planning and workforce modeling. These two phrases are often used interchangeably, but they address different needs.

Workforce planning focuses on aligning the needs and priorities of the organization with those of its workforce based on aggregate workforce data, typically segmented by job roles, to identify gaps in supply and demand for headcount under various business scenarios. The goal is to measure what is needed to fill these gaps to satisfy best the business scenario (such as needing to increase revenue, which can be accomplished by expanding the salesforce by 8%).

Workforce modeling executes the plan by forecasting future organizational structures, positions, layers, and costs to optimize current and future human capital resources. It effectively puts a “plan into action” and provides the blueprint for organizational changes and actions needed to align the workforce with the organizational goals supported by the workforce plan.

The workforce plan

To optimize your workforce with the right people and skills at the right time and cost, successful planning requires a mix of inputs (quantitative data, qualitative insights), stakeholders (executives, HR business partners, HR functional leaders), and activities (interviews, workshops, data analysis).
After defining your workforce planning objectives, follow these steps to develop your plan:

Conduct a strategic analysis of business conditions

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Forecast headcount supply and demand

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Assess the risk of talent shortages

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Design HR interventions

Establish accountability for improved results

By following these steps, you can now conduct workforce modeling to see how you can best meet the plan and address the quantifiable gaps that have been identified. To do this, it is critical that you can visualize your current organizational structures to accurately model the changes needed to deploy the workforce of the future successfully.

Questions driving workforce planning

  • What is our demand for headcount under different business conditions?
  • Are we forecasted to lose a significant number of employees to termination or retirement?
  • What skills will we need in the future?
  • In which job roles do we face the most significant workforce gaps?
  • How can we reduce the risk of talent shortages?

Key benefits of workforce planning

  • Faster identification of workforce risks
  • Lower costs of turnover and temporary labor
  • Improved visibility into productivity
  • Better identification of critical skills
  • Speedier hiring of staff to fill high-value jobs

The importance of workforce modeling

Begin with a snapshot of your current organizational structure and measure KPIs such as headcount, spans, and budget, to name a few. You can then model changes to your existing org structure to help align the workforce with the goals of the workforce plan.

Model and evaluate the workforce plan’s impact on your organization

By creating one or more modeling scenarios based on your current org structure, you and your colleagues can collaborate and simulate organizational changes that best meet the business scenario and goals defined in the workforce plan. The easiest way to do so is to visualize and measure their impact on headcount, span of control, reporting relationships, organizational structure, and budget.
For example, if your plan requires new sales positions to increase revenue, you can model the creation of these new positions, how to fill them, and the impact on your organizational structure and headcount budget.

Gain clear insights by visualizing and measuring the impact of changes

To measure the impact of organizational changes, an org chart visualization that lets you create simulations and reorganizations within the context of your current org structure is beneficial. This visualization allows you to better understand the impact these changes will have, such as an increase in headcount, changes in reporting relationships, impact to headcount budgets, etc.
Using key metrics, you can track the changes and their impact on headcount and budgets. You can also generate a change report to capture all changes and transactions being modeled within your new organizational structure.

Questions driving workforce modeling

  • What organizational changes are needed to meet our plan objectives?
  • Do we need to add new positions to fill forecasted talent gaps?
  • Do we have the talent internally to help fill anticipated open positions (succession planning)?
  • What is the headcount budget impact for organizational changes proposed?

Key benefits of workforce modeling

  • Create multiple plan scenarios
  • Develop plans using data from your existing organizational structure (read more about this in our “Organizational Structure” article)
  • Collaborate with colleagues and partners on workforce plans and how best to execute them
  • Measure the financial and headcount impact of various plans to arrive at the optimal plan

Optimize your workforce plan and model the impact before putting it into action

If you’ve already made up your mind that you need to conduct workforce modeling to best execute organizational changes to satisfy the workforce plan, you may wish to consider working with a software solution that brings in your organizational data and structure so you can model out and measure the impact of changes needed.
If interested in such org modeling capabilities, feel free to visit the page of our org charting tool Ingentis org.manager.

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