workforce planning model

Literally Everything You Need to Know About Strategic Workforce Planning Modelling & Analysis

At its core, workforce planning is about getting the right people with the right skills in the right jobs at the right time for the right cost. It helps organisations avoid being understaffed with too few employees or overstaffed with too many employees to know what to do with.

A crucial part of the process is working out how best to approach the workforce planning model and analysis, because this determines your ability to forecast the current workforce supply and demand for your future workforce. Without the correct workforce planning model, you won’t understand the potential gap (and ensuing hurdles) between supply and demand. There are several modelling approaches on the market, but there’ll only be one workforce planning model that’s right for your business.

In this article, we discuss everything you need to know to get off on the right foot when you start your strategic workforce planning process and picking the correct workforce planning model.

Contents

What is a workforce planning model?

A workforce planning model is a comprehensive approach to analysing your organisation’s workforce as it relates to your strategic priorities. It also provides a framework with which you can structure the process of your organisation’s workforce planning, creating a detailed map of where your resources are and where your resources need to be to succeed in delivering the organisation’s goals.

What a workforce planning model achieves

So, what does workforce planning seek to achieve, and how does a workforce planning model actually achieve that?

Workforce planning seeks to prepare your business for the future, by providing the knowledge and means to remain successful and competitive. It’s a planning process all about analysing what you have, what you need, and shaping the talent and capacity of the workforce to predict future needs and meet the demands of your organisation’s strategic goals and objectives. Workforce planning models are one of the most useful tools to assist in your business strategy, incorporating information gathered from internal and external environmental scans and well as Human Resources managers.

The workforce planning model, therefore, is a structured step-by-step process to getting your organisation from where it is now to where it needs to be in the future as per your organisation’s priorities.

The most basic steps in strategic workforce planning are:

Infographic summarising the basic workforce planning steps

Organise

Consider what issue you want to solve with your workforce plan, and who you need to collaborate with to do it.

Gather

Collaborate to develop likely and alternative scenarios that may occur in the future and work out what your future workforce needs to be successful in those scenarios.

Analyse

Analyse the risk areas in your organisation to understand where you may be lacking that will prevent you from attaining your planned outcomes.

Treat & monitor

Plan meaningful and efficient solutions, but make sure you keep monitoring your workforce plan to ensure it continues to be meaningful and efficient for your business.

The exact steps may vary from model to model, but the general idea is the same, and you don’t have to carry them out strictly in order. The whole idea is to organise the vast task of workforce planning into smaller, manageable tasks.

How does analysis fit into your workforce planning model?

Modelling often involves analysis, and analysis involves considering what if: what if we need to increase demand in this particular job role? What will that mean for supply to the job role? Is there a sufficient supply of the right talent—within our organisation, industry, country, elsewhere? Or if not, where do we get the supply from? Or will we need to build it? It’s important to know how that analysis will shape the creation of your workforce plan, and what it means.

So how will you analyse these critical factors to inform your workforce planning process? Here are five common types of analysis used in workforce planning:

These analyses will help you to identify and address certain aspects and problems that may arise in your workforce and affect your organisation’s ability to achieve its long-term strategic goals and objectives.

Infographic summarising 5 types of workforce planning analysis

Supply analysis

Supply analytics will help you understand what your organisation’s present workforce is like, and how it will be affected and changed over time. Some questions you should ask when investigating supply are:

Demand analysis

Demand analytics will help you understand the workforce requirements of your workforce now, and the workforce requirements you will have for your future workforce. Some questions you should ask when you engage in a demand analysis are:

Gap analysis

This will help you understand the “gaps” or disparities between the demand and supply of the workforce, allowing you to see what gaps will have the most impact on your business and its performance. Some questions you should ask when investigating gaps are:

Risk analysis

A risk analysis will help you understand and identify potential “risks” that could prevent your organisation from performing or reaching its goals and outcomes. Some questions you should ask when investigating risks are:

Regression analysis

regression analysis will help you understand which independent variables have an impact on the dependent variable (your workforce). Some questions you should ask when conducting a regression analysis are:

4 common workforce planning models 

There are multiple approaches and models utilised for workforce planning. Some simple, some not so much, and some that just won’t be a good fit for your organisation and its goals and strategies. That’s just because there is no one cut and dry way to approach your workforce planning process. You’ll need to decide which model is the best for you and customise it accordingly.

However, there’s still value in taking a step-by-step walk through different modelling and analysis approaches, especially when trying to determine the best modelling approach to workforce planning for your organisational context.

We’d be remiss not to note that, regardless of the approach you use, modelling does not provide the mythical “answer” to all your problems. Modelling can help you visualise possible futures, but it’s what you do about those possible futures that is key. It’s like a weather forecast; it’s not always correct, but it does provide a direction and insights about the clothes you’ll need to wear on a particular day, if you’ll need an umbrella or if you can go about your day as expected.

But which is the right planning model for you? Below are four common workforce planning modelling approaches and the pros and cons of each. Each planning model becomes increasingly more nuanced, so we recommend you start basic before you throw yourself into anything too complex.

Infographic listing 4 workforce planning models

1. Equilibrium Modelling 

The equilibrium model is essentially about gathering data on your existing workforce using a supply analysis and then utilising your existing workforce data (in terms of headcount, turnover, and cost) to model the balance between workforce supply and demand. You can use a combination of current and historical workforce data to predict what will likely occur in the future based on what trends occurred in the past. As time goes on, you’ll have more historical data to look at, and will be able to review and adjust long-term trends accordingly.

Pros

Cons

2. Deterministic Modelling 

The deterministic model looks at things you know will most likely happen in the future. Most Human Resources leaders talk about promotions with this model, but this model can also be adapted for retirement. Let’s consider two scenarios:

  1. After you have gathered intel on your current workforce, you find that four employees will be up for promotion this year based on their performance and competency. This is a good thing, but as they move up the corporate ladder, you will need to replace them. This is otherwise known as succession planning.  
  2. The looming career endgame: retirement. Right now, older workers are working longer, meaning that the age of 65 doesn’t hold nearly as much weight when it comes to retirement as it did in the past. However, you can probably tell if you have workers looking to step down from full-time work in the future, allowing you to properly succession plan. 

These are both examples of deterministic events. In deterministic models, regression analysis is often utilised to work out and explain things like retirements, attrition, tenure and supply. The model is also used to determine how these factors may play out over, say, three years, based on your assumptions for the potential demand for say a particular segment of the workforce or job role. 

Pros

Cons

3. Flow Modelling

The flow model attempts to gauge the future of your workforce by asking the “simple” questions. If you are a business that sells goods, you might ask: what will happen if we launch a new product or service to new or existing customers?

Honestly, this question can be asked of many organisations and businesses. Still, suppose you think about it in terms of your workforce’s flow, otherwise known as the employee life cycle. In that case, you may need to hire new talent, create a development plan for your employees already working within your organisation, or even utilise a casual or contingent workforce if you want to pilot a new service offering initially. Making a specific change within your organisation can significantly impact your headcount and the talent pool that you draw from.  

To tackle such an issue, you may want to consider your future goals and what changes will be pending, and then ask yourself what would happen and what would need to change if those goals were the top priority right now. This will help you judge how much change is happening inside your workforce when a business goal changes.

Pros

Cons

4. Optimisation Modelling 

Last, but certainly not least, is the complex optimisation model which can present an outlook from the get-go. The name of the game is to understand how to meet your business goals with the talent you currently have employed. It looks at what future goals your business wants to accomplish and works backwards to see what changes need to be made in order to make the goal possible.  

Take running a marathon, for example. Many people make a goal to run a marathon every year, but how are they going to do it? Unless you run marathons all the time, you would have to start small from a short jog to eventually running longer and longer distances, until you have advanced to the point where you feel ready to race. 

When looking at the optimisation model within a business goal, the questions you need to ask are: 

Workforce planning requires more heavily on statistics and analytical tools than a personal goal to run a marathon. You’ll find that you’ll likely need complex workforce planning software systems that can help break down your data in ways you never thought were possible in order to achieve it. 

Pros

Cons

The takeaway for your workforce planning process

The whole idea behind workforce planning is to align your workforce with your organisation’s goals and objectives, and you’ll need the right modelling approach and analyses to achieve that. Whatever the method, modelling is a critical component for understanding:

Some workforce planning models are easy to understand and use, while others are a bit more complex. In the end, the only one who knows which workforce planning model is the best fit for your organisation is you. None of the models can be considered one-size-fits-all, so you’ll need to customise whichever model you choose to fit best with your organisation.

Book a call today with the team at Panorama and let’s discuss how workforce planning software can drive efficiencies in your organisation.