Strategic Workforce Planning meets Talent Management

July 29, 2024

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Sven Elbert, Senior Analyst HCM and Talent
Fosway Group

Strategic workforce planning (SWP) and talent are now under the microscope as companies across Europe grapple with economic challenges, including inflation, technological upheaval, and fluctuating labour markets. In addition, companies are projected to grow responsibly, within economic resource constraints and with a focus on creating fair, transparent and attractive work environments. To cope, business and HR leaders need a deep-seated evolution in how they predict, plan, and prepare their workforce. The secret of “sustainability” in HR requires a strong mix between knowing and predicting from data, setting targets, and planning accordingly. HR organisations need a strategy to build a resilient and adaptable workforce, primed for present challenges and future opportunities. This blog is a straight-shooting resource for HR and business leaders aiming to navigate economic complexities and ensure their organisation’s success.

The role of Strategic Workforce Planning and Talent Management in economic turbulence

In the midst of Europe’s economic turbulence, the need for SWP and talent management has never been more pronounced. Businesses must forecast and plan for talent requirements with precision to capitalise on the current economic climate. At the same time, organisations are looking to exploit artificial intelligence (AI), which is driving profound changes in jobs and skill demand. AI technologies are automating routine tasks, creating new roles that require advanced technical skills, and necessitating a workforce capable of leveraging these innovations. Equally, SWP emerges as the linchpin in this scenario, enabling organisations to align workforce capabilities directly with future business objectives, allowing for dynamic adjustments of talent and keeping companies ahead of economic shifts. Strategic Workforce Planning also empowers HR to take a proactive approach to talent management, aligning workforce with business objectives and ensuring long-term success for the organisation.

At the same time, the strategic deployment of talent management has evolved from a support function to a core component of organisational resilience. The ability to retain, develop, and strategically align talent with business goals is now a critical competitive advantage. Agile and flexible talent strategies are fundamental for adapting to economic conditions and shaping the future trajectory of the organisation. Companies demonstrating agility in talent management, and responding swiftly to economic indicators, AI advancements and leverage ESG compliance to their advantage, are the ones setting the pace in their industries. A blend of predictive planning and strategic talent alignment ensures not just survival but sustained growth in an unpredictable economic landscape.

Adapting to technological and market shifts

Technological advancements and shifting market dynamics are redefining the future of work, compelling companies to adapt quickly to stay competitive. Integrating new technologies, particularly AI, while keeping ESG in view is crucial, as successful modern organisations require an engaging and motivating work environment that is based on fairness and openness. For one, this transformation demands a forward-thinking approach in SWP and talent management to equip the workforce with necessary skills. The rise of automation, AI, and digital platforms is drastically changing job roles and skill requirements. HR leaders must anticipate these shifts, addressing skills gaps through targeted training and development.

Additionally, market shifts like the gig economy and remote work are reshaping employment patterns. Businesses need strategies to attract and retain top talent, including hybrid work environments, freelance opportunities, and robust remote work policies. By staying ahead of these trends and embedding them into SWP, organisations can better decide what skills to buy, borrow or build. SWP enables HR and business leaders to proactively manage talent, align the workforce with business objectives and ensure long-term success. Effective communication between stakeholders is crucial for evidencing risks and justifying new investments or strategy changes.

Resilient, real-time, and with attention to detail – the new paradigm for Strategic Workforce Planning

The new paradigm for SWP centres on resilience, real-time responsiveness, and attention to more granular details. The days when SWP was a three-month exercise and only focused on job families, headcount and personnel cost are over. Organisations must be agile, quickly adapting to changes and disruptions. For example, organisations must be able to consider the impact of the EU pay equity directive alongside a view of what future skills are going to shape their industry. Agility is required, but agility alone is insufficient. Building resilience means creating a workforce skilled for current challenges and flexible enough to pivot as circumstances demand, while at the same time considering longer term ESG goals.

Organisations need to adapt and derisk their plans. One day, HR needs to be able to zoom in on skills, as AI augments or replaces some skills. On another day, they need to zoom in on salary adjustments to ensure compliant and fair pay policies are executed upon, and compliance-risk is minimised. A unified approach where SWP has access to operational data from all areas in HR is key for model various scenarios, provide recommendations and devise winning, sustainable and resilient strategies.

Data-driven decisions are a game-changer in SWP. Real-time data and HR analytics allow organisations to predict workforce trends, spot skills gaps, and optimise talent deployment. With instant access to data, businesses shift from reactive to proactive planning. As strategic workforce plans no longer sit in Excel sheets but find their way into the core HR system, they become more actionable, and refined by real-word decisions.

Ensuring Continuous Learning and Evolution in Talent Needs a Modern HR Tech Stack

Talent management was never a one-off task. As business landscapes and job markets change, so must workforce skills and capabilities. In the new paradigm, SWP is becoming a driver for talent programmes, and upskilling/reskilling initiatives, with the goal of embedding lifelong learning in the company culture. Formal learning, on-the-job training and mentoring are now key initiatives to execute the strategic workforce plan. But equally, talent acquisition and the systems to manage the flexible workforce are playing an equally important role. Therefore, not linking the HR systems used for SWP, recruiting, talent management, and learning seems to be a significant miss under this new paradigm.

Often, employees need to perceive these initiatives as joined up to buy into their ideas more easily. However, achieving this is challenging without a harmonised user interface, a unified internal support structure, and cohesive experiences. By encouraging a growth mindset, where employees strive to improve and expand their skills, and by committing to continuous learning, companies keep their workforce competitive and ready for future demands, securing long-term success for both the employee as well as the organisation.

About Fosway

Fosway Group is Europe’s #1 HR Industry Analyst focused on Next Gen HR, Talent and Learning. Founded in 1996, we are known for our unique European research, our independence and our integrity.

And just like the Roman road we draw our name from, you’ll find that we’re unusually direct. We don’t have a vested interest in your supplier or consulting choices. So, whether you’re looking for independent research, specific advice or a critical friend to cut through the market hype, we can tell you what you need to know to succeed.