The famous mantra “failing to plan is planning to fail” may seem irrelevant to most, but in fact it may be one of the most important for businesses to understand. Strategic workforce planning is a process that ensures that your business has the right people in the right jobs at the right time to achieve maximum results. Strategic planning enables companies to understand their current situations and take advantage of labor market forecasts.
Considering multiple elements of the labor market enables employers to make informed decisions and detect potential problems they may encounter during the hiring process.
To effectively plan, businesses need to understand how the current labor market directly affects their employment process. Considering multiple elements of the labor market enables employers to make informed decisions and detect potential problems they may encounter during the hiring process. Today’s economy provides a unique situation that requires businesses to focus primarily on two elements of the labor market when strategically planning. Those elements include demographic trends and talent movement trends within each industry.
Demographic Trends and Hiring
First, demographic trends are rarely given the consideration they deserve during the hiring process, but they can severely impact how businesses create strategic plans. Equal opportunities are promoted in the majority of businesses today, but research shows there are some demographics to think about in order to maximize productivity.
Both Catalyst and McKinsey & Company conducted research that demonstrates that companies with a significant number of women in management have an increased return on investment. A study from London Business School suggests that when teams are equally divided between men and women, productivity increases. The research also shows that gender balance effectively counters groupthink. When strategically planning, consider the variations in your current workforce and consider how a more diverse demographic could impact productivity.
A study from London Business School suggests that when teams are equally divided between men and women, productivity increases.
Planning strategically also forces employers to consider the amount of experience needed for each job, and the optimal age of the best person to fit the job. The age of the available workforce is currently a potpourri of developing and experienced professionals. Employers should stay abreast of age trends and consider how different generations will affect their hiring processes.
This is especially important because of the “baby-boomers.” According to forecasters, “by 2020, there will be more 55-plus workers grinding away than at any other time in our history. As a result, labor experts foresee a rush by the nation’s businesses to accommodate the aging workforce.” A strategic plan should incorporate how this trend will affect businesses, and what adaptations will be necessary in order to keep productivity fluid.
Where the Talent Is
Talent movement trends are the second important factor for understanding the effects of the current labor market on one’s business. Movement trends can be driven by many external factors such as job security, better pay or the opportunity for more interesting work. Forbes recently published a list of the top 10 cities for predicted job growth in 2009. The cities were chosen based on several components, including current unemployment rates. The unemployment rates in the top 10 cities were all equal to or lower than 5.6 percent. Companies should research unemployment rates in their cities and compare the results to other competitive regions in order to predict where job seekers will most likely relocate.
In another recent study, Forbes ranked all 50 states in terms of those that are best for businesses. States were ranked by costs, labor supply, regulatory environment, current economic climate, growth prospects, and quality of life. Incorporating studies like the ones mentioned above into strategic planning will give businesses an advantage in several facets related to productivity and hiring.
A challenging economy often increases the supply and affordability of qualified workers.
The current macroeconomic forecast looks bright for businesses. A challenging economy often increases the supply and affordability of qualified workers. Available positions are being filled in half the time they used to be due to the amount of usable talent currently seeking employment. Hiring managers should be aware that, despite the optimistic possibility of hiring a top performer quickly, filters are necessary to ensure that only the best fit for the job is selected from the large pool of prospective employees.
By effectively applying a strategic workforce plan, companies can specify the kinds of individuals needed for each job, and when those individuals will be needed. Employee assessments enable employers to pinpoint the best candidates for each position based on each prospective employee’s results. Creating job match patterns will strengthen the employer’s plans as well as provide insight into the best fit for each personality in the company.
The current labor market is ripe with talent for those looking to hire. Employers who consider the previously mentioned elements will have a firm understanding of what they can expect to find during the hiring process. With a clear understanding of the labor market, employers can implement their own informed strategic workforce plans.
