Strategic Workforce Planning: Navigating the Future of HR

Introduction

Strategic workforce planning is crucial as businesses face rapid changes in technology and global markets. In the 2024 Better Workplaces Challenge Cup, industry leaders discussed innovative strategies to align talent with future needs. Rather than avoiding workforce planning due to its complexity, companies are using it to address skills gaps, impending retirements, and inclusion goals, ensuring agility and resilience in a shifting landscape.

Jeremy Reese from H&M Group emphasized the importance of flexible talent strategies, including on-demand learning and AI-driven analytics. His approach highlights how proactive workforce planning can upskill employees and prepare teams for emerging challenges, making it a key competitive advantage.

As organizations navigate an increasingly complex and uncertain business landscape, strategic workforce planning has become crucial for aligning talent capabilities with emerging needs. This SHRM Labs Fireside Chat for the 2024 Better Workplaces Challenge Cup series examines innovative approaches to workforce planning that can drive more agile and resilient workforces.

Research from APQC reveals that rather than abandoning workforce planning because of its difficulty, many organizations are leveraging it to tackle a wide range of business challenges. These include getting ready for impending retirements, closing skills gaps that have developed over time, decreasing voluntary turnover among valuable employees, better utilizing the existing workforce, and satisfying inclusion and diversity (I&D) objectives.

Setting the Stage for Workforce Planning

SHRM Labs welcomed Jeremy Reese, global head of learning, strategy, and content at H&M Group, to launch this forward-thinking discussion. With extensive background leading talent, succession planning, and workforce planning teams, Reese shared valuable perspectives. As he explained:

“My role currently is that I lead all learning strategy, really, and content for our H&M Group,” Reese said. “So, what we focus on at my team is the many ways our employees learn and how our colleagues learn and are best equipped with skills to drive the workplace forward and their careers forward.”

Here, Reese emphasized myriad development channels including on-demand microlearning modules and mentoring programs that bolster individual capabilities while advancing the workplace. Such an approach promotes a culture hungry to upskill, reskill, and future-proof talent for established and emerging roles. With consumer behaviors morphing rapidly, so, too, must workforce capabilities across the entire value chain from designers to distribution center employees. This urgency points to the retail industry’s seismic disruption.

With this 360-degree focus on nurturing talent trajectories inside a complex global organization, strategic workforce planning emerges as a crucial competency in navigating uncertainty. Reese’s priority regarding versatile development programs that prepare teams for fluctuating scenarios echoes that reality.

With this focus on developing talent capabilities and trajectories inside a complex global organization, workforce planning emerges as a crucial competency—not just for retail, but across industries.

Defining This Strategic Priority

But what exactly is workforce planning? Reese said, “It boils down to really three things—your current state: where you are now, what you're able to do; your desired state: where you wanna go, who you wanna be, what it looks like for your organization in the future; and then the third pillar is how to get from your current to your desired.” Organizations can model and refine their workforce strategy through continuous improvement with this framework.

Workforce planning is a proactive, strategic process that involves:

• Assessing the current state: Your capabilities, resources, needs, and gaps.
• Defining the desired future state: Your vision, business objectives, and required competencies for that future.
• Determining the transition: The strategies, investments, and changes needed to bridge the current and desired state.

This process necessitates factoring in variables such as emerging technologies, market conditions, and evolving skill demands, making adaptability essential.

However, research from Deloitte shows that only 11% of organizations demonstrate strategic maturity in their workforce planning approach. This signals an opportunity to elevate the strategic role of workforce planning.

Approaches on the horizon include predictive workforce planning using advanced analytics, scenario-based planning that maps talent needs across multiple plausible futures, and the leveraging of AI systems as collaborators in modeling and activation.

Companies leading in building these muscles now will have first-mover advantages as new challenges emerge. They will outmaneuver rivals constrained by legacy practices.

Key Trends Reshaping Workforce Planning

Reese emphasized that flexibility is paramount in navigating issues such as:

• Remote and hybrid work models.
• Redefining performance assessment.
• Embedding I&D principles.
• Harnessing artificial intelligence and automation.

Let’s explore how each of these trends impacts strategic workforce planning.

Planning for Distributed Teams

With remote and hybrid environments now common—58% of the U.S. workforce offered hybrid work in 2022, according to Gallup—organizations must re-evaluate workforce planning. Reese advised, “Organizations really need to think about performance management and assessing employees in a remote or even hybrid environment with different roles coming in on different days.”

The priority is establishing equitable employee expectations and processes as well as limiting subjectivity through accountability and transparency. Rather than assumptions, data and insights should inform planning to support engagement and productivity across distributed models.

Centering Inclusion and Diversity

Workforce planning interlinks with the promotion of diverse leadership pipelines and perspectives. Inclusion must embed itself systematically throughout talent processes, including attraction and advancement protocols. Strategies such as partnerships with minority professional groups, anti-bias hiring practices, representative succession planning, and comprehensive diversity analytics tracking help sustain real change.

Companies integrating I&D into planning are 2.9 times more likely to make better talent decisions, according to Mercer. Additionally, organizations in the top quartile for ethnic and cultural diversity outperformed those in the bottom quartile by 36% in profitability, according to McKinsey & Company. In Reese’s view, “If there are no diverse leaders in the room, how diverse could your perspectives even be?”

But driving inclusion into organizational culture requires more than programs. Rethinking everyday workplace experience through lenses such as disability accessibility, religious observance accommodations, the destigmatization of mental health, and the sensitization of language creates belonging.

Organizations must incorporate I&D principles into planning, including gathering employee feedback and mitigating bias in decision-making. This enables genuinely informed choices that serve the whole workforce.

Centering I&D aligns with top organizational priorities for 2024 of retaining top talent and recruiting skilled employees. HR professionals specifically cite recruiting from more diverse and underutilized talent pools as a strategy for improvement in 2024, including people with disabilities and formerly incarcerated individuals. Taking steps like these to embed I&D principles through workforce planning and talent strategies promotes retention and the acquisition of skilled talent from a wider range of backgrounds.

Embracing AI and Automation

AI and automation also carry workforce planning implications, including skills gaps and new ways of augmenting teams. Applied ethically, AI could enhance inclusion, predictive analytics, skills-job matching, and productivity. But oversight is crucial.

According to Deloitte, 63% of companies already use AI tools for workforce management. In addition, 26% of HR departments leveraged AI in 2024, most often for talent acquisition (42%), employee training and development (36%), and people analytics (21%). As Jeremy Reese highlighted: “Your Bard, your ChatGPT … is going to have a significant impact on workforce planning.” In fact, by 2025, 60% of HR departments are expected to be using AI, according to Gartner.

The advancement of AI adoption shows promise, but only 12% of HR professionals and 15% of U.S. workers believe AI is being effectively integrated into the workplace, SHRM found. This will require a thoughtful approach to embedding AI into key operations. Rather than total displacement, humans and AI can combine strengths. Smaller, tech-savvy teams can partner with AI tools requiring updated competencies. Data and analytics equally empower more accurate planning.

Guardrails that instill accountability, impact assessments on automated decisions affecting people, and using AI to deconstruct systemic prejudice should maximize the benefits of data-driven objectivity while respecting human dignity.

Continuing the Workforce Planning Journey

While these insights only scratch the surface, one truth remains—we operate in an era of acceleration. Reese summarizes: “Remaining on the cutting edge of your business really means aligning this to people, as well.”

As a strategic partner guiding organizational success, HR carries the opportunity to pioneer workforce planning that supports both near-term agility and long-term growth.

The ingredients for leading this evolution include curiosity, courage, and connection. Curiosity to question legacy practices and envision new workforce models aligned to strategy. Courage to pilot unconventional planning paradigms despite uncertainty. And connections through cross-functional collaboration to ensure alignment.

The payoff for investing in next-generation workforce planning capabilities is the ability to rapidly compose teams from across the organization, external partners, or AI-powered talent clouds to tackle emerging business challenges. More agile than structure-bound rivals, these reactive and visionary companies will unleash human potential.

But the future depends on HR teams stepping up with bold ambition today to become architects of possibility. This means not just digging into current problems but designing revolutionary flexible structures that turn constraints into competitive advantages.

Leaders who embrace this mindset can transform disruption into fuel that accelerates workforce innovation for the next normal. They ask “what if” before “why bother” to impossible ideas that could redefine their talent vision and reroute roadblocks into launch pads for policies their peers will emulate tomorrow.

In this new paradigm, the workforce planning journey never ends. But trailblazers must take the first steps if anyone is ever to follow in their footsteps.

Best Practices for Effective Workforce Planning

Transforming workforce planning into a sustained edge depends on making it a continuous, data-driven process, not a yearly checkbox.

The following step-by-step guidelines can elevate planning through assessment, strategy, implementation, and improvement.

Initial Evaluation

Conducting a thorough workforce review kicks things off. For example, a recent survey found that while 92% of HR professionals said workforce planning is important, only 42% reported that their organizations are effective at it, indicating room for improvement. This involves:

• Talent Audit: A skills inventory of strengths and needs across the organization, highlighting unseen gaps to guide priorities using evidence. Only 55% of HR professionals reported that their organizations regularly conduct skills gap analyses. Such talent audits provide a skills inventory of strengths and needs across the organization, highlighting unseen gaps to guide priorities using evidence.
• Feelings Check: Most HR leaders (78%) said metrics like employee engagement are critical for workforce planning. Regularly surveying engagement, culture, and development perceptions helps organizations take the temperature across teams. Uncovering pain points matters.
• Context Scan: Just 29% of employees strongly agreed that their performance is managed to motivate outstanding work. Monitoring market signals arms organizations to boost agility—rival investments, disruption risks, changing demographics, and new niche skills all matter.

Tapping managers and leaders to fact-find builds buy-in and transparency and upskills planning savvy companywide in the process.

Roadmapping

Equipped with workforce intel, charting destinations means linking plans to objectives by:

• Possible Futures Mapping: Aligning workforce plans to strategy is a top challenge (cited by 71% of organizations), yet doing so grows revenue—4.4 times more likely for mature planners. Modeling talent and tech formulas across future scenarios based on goals stress tests strategies.
• Attention Funneling: Weighing big bets such as reskilling, acquisitions, automation, and on-demand talent against gaps and needs. With skills gaps so prominent (68% of companies now invest in reskilling and upskilling), these programs warrant weighing amid overall plans and budgets.
• Inclusion Immersion: Diverse executive teams raise profitability 33% more than peers. Thus, baking in inclusion and diversity at every planning turn links directly to results.

Going Live

Activating robust workforce plans requires communicating guardrails for agile execution across teams via:

• Change Bridging: 76% cite change management as critical here. Prepping managers to normalize constant learning and workforce shifts readies organizations. Welcoming input shapes evolving actions.
• Responsibility Spreading: Mapping individual and team ownership of plan parts through RACIs, welcoming input to shape evolving actions.
• Agility Dials: With 85% of executives prizing adaptability as a competitive advantage, monitoring talent dashboards, project health scores, and employee feedback responses provides visibility to quickly respond to emerging needs.

Constant Refinement

Given market swings, 69% of organizations now review workforce plans quarterly or more often through:

• Quarterly Reviews: Re-simulating scenarios, indicators, perceptions, and talent benchmarks to realign with shifts.
• Fail Forward Ethos: Destigmatizing setbacks post-launch as learning fuel through constructive feedback. Small-scale pilot testing matters. Constructive feedback and small-scale pilot testing enables failing forward rather than setbacks.
• Talent Tech Investment: With 53% of HR leaders experiencing burnout, talent tech investment matters—platforms delivering real-time analytics, surveys, and AI-assisted recommendations minimize disruption risks.

Common Pitfalls to Avoid

On the surface, effective workforce planning frameworks exist, yet even seasoned teams risk critical missteps without mitigating pitfalls. The path forward requires vigilance.

Strategic Integration Gaps

Specifically, the absence of strategic integration sabotages plans. Workforce talent priorities need to be embedded within overarching organizational goals through robust cross-functional coordination—no isolated planning permitted. More plainly, objectives, timelines, and capability assumptions require validating against future scenarios. For alignment, leadership engagement must persist past periodic checkpoints when launching plans through reliable communication rhythms. Their sustained involvement enables smoother adaptations when conditions inevitably shift.

Communication Breakdown Risks

Additionally, communication inadequacies carry grave consequences. Without rigorous change management protocols equipped to the same analytical caliber as data capabilities, even well-intentioned plans crumble. The ripples emerge rapidly—information deficits confuse stakeholders, fuel damaging rumors, and estrange impacted groups amid transitions. However, direct transparency around the underlying rationale humanizes the evolution’s direction. Moreover, inconsistent visibility from leadership regarding obscured progress or sudden revision explanations erodes enterprise trust over time.

Data Deficiencies

Finally, data deficiencies invite misaligned interventions by over-relying on outdated assumptions, tribal knowledge, or institutional intuition without empirical evidence. Thus, failures to compile holistic workforce intelligence across functions, past programs, and emerging roles risk repeating history’s mistakes. Even seasoned instincts only suffice so far without regularly reconfirming that earlier approaches still maintain relevance. To genuinely progress, building future capability outpaces dusting off prior era’s playbooks, given the metastasizing complexity stretching institutional knowledge thin.

Spotlight on Innovations in Workforce Planning

As workforce planning continues to evolve as a strategic priority, a vibrant ecosystem of startups is pioneering new approaches and technologies. A few examples showcased at the 2024 Better Workplaces Challenge Cup:

• Certif-ID offers a global skilled professional marketplace, connecting talent from developing countries to opportunities worldwide. Powered by digital credentialing and blockchain technology, it enables organizations to access specialized talent with validated competencies.
• Parker Dewey provides micro-internships, which are short, paid projects that give college students professional experience while allowing employers to assess capabilities firsthand. This enhances early recruiting through engagement.
• PeduL leverages influencer-created social media content about roles to attract Generation Z and Millennial candidates, integrating with existing application tracking systems to simplify hiring.
• Pyxai harnesses AI for scenario-based assessments that predict candidate success based on soft skills such as adaptability and creative problem-solving. Their platform aims to boost retention through data-driven insights.

With innovations like these alongside inspiration from leaders including H&M Group, organizations have an unprecedented chance to make workforce planning a sustained competitive advantage.

Concluding Thoughts

Rather than perfect plans, organizations need responsive workforce strategies factoring in emerging skills, models, and technologies. With innovation thriving across startups and enterprises, leaders have an unprecedented chance to make workforce planning a sustained competitive strength.

But realizing this potential requires embracing planning as a continuous, data-driven process—not an annual compliance exercise. Building future-ready capabilities before rivals means investing in analytics, collaboration tools, and external partnerships that add visibility.

This journey depends on asking forward-thinking questions daily. How could we enhance agility? Where are skills gaps emerging? Who are unconventional partners? Framing conversations around possibility first creates momentum.

Staying curious, collaborative, and proactive ensures you can evolve workforce planning to drive future opportunities. Now, over to you, what workforce planning insights resonated most with you? Which trends matter most as you support your organization’s goals? The conversation continues ...

FAQs

What is workforce planning?

Workforce planning is a strategic process that involves assessing the current workforce capabilities, determining future talent needs, and implementing plans to bridge gaps. It factors in trends such as automation and distributed work models.

Why does workforce planning matter today?

With growing automation and remote work, organizations need data-driven workforce planning focused on reskilling, engagement, inclusion, and collaboration between humans and artificial intelligence.

How can workforce planning enhance competitiveness?

Companies that transform workforce planning from a compliance activity into a sustained competitive advantage will attract and retain strategic talent better aligned to emerging business priorities.

What workforce planning innovations show high promise?

Areas with potential include predictive analytics leveraging AI, scenario planning through simulations, and composable project teams via smart matching algorithms and on-demand talent clouds.

References and Further Reading

[SHRM State of the Workplace Report, SHRM, 2023-2024.]
https://www.shrm.org/content/dam/en/shrm/research/2023-2024-State-of-the-Workplace-Report.pdf

[Workforce Planning: The Future of Work, SHRM.]
https://www.shrm.org/events-education/education/team-training/workforce-planning-future-work

[5 Key Challenges Organizations Will Face in 2024, SHRM.]
https://www.shrm.org/content/dam/en/shrm/executive-network/SOTW-23-24Enterprise-Solutions.pdf

[Aligning Workforce Strategies with Business Objectives, SHRM.]
https://www.shrm.org/topics-tools/tools/toolkits/aligning-workforce-strategies-business-objectives

[How to Modernize Workforce Planning, SHRM.]
https://www.shrm.org/executive-network/insights/people-strategy/how-to-modernize-workforce-planning

[Practicing the Discipline of Workforce Planning, SHRM.]
https://www.shrm.org/topics-tools/tools/toolkits/practicing-discipline-workforce-planning

[Diversity wins: How inclusion matters, McKinsey.]
https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-wins-how-inclusion-matters

[Global HR Trends, Mercer.]
https://www.mercer.com/our-thinking/career/global-talent-hr-trends.html

[Human Capital Trends, Deloitte, 2024.]
https://www2.deloitte.com/us/en/insights/focus/human-capital-trends.html

[The Skills-Based Organization: A New Operating Model for Work and the Workforce, Deloitte.]
https://www2.deloitte.com/us/en/insights/topics/talent/organizational-skill-based-hiring.html

[The Future of Hybrid Work: 5 Key Questions Answered With Data, Gallup.]
https://www.gallup.com/workplace/390632/future-hybrid-work.aspx

[HR Future-Proofing vs. Firefighting: 5 Strategic Workforce Planning Tips, Visier.]
https://www.visier.com/blog/strategic-workforce-planning-tips/

[The $8.5 Trillion Talent Shortage, Korn Ferry.]
https://www.kornferry.com/insights/this-week-in-leadership/talent-crunch-future-of-work

[AI study: Over 60 percent use Artificial Intelligence at work – almost half of all employees are worried about losing their jobs, Deloitte.]
https://www2.deloitte.com/ch/en/pages/press-releases/articles/ai-study-almost-half-of-all-employees-are-worried-about-losing-their-jobs.html

[The Top 3 Performance Management Basics for Managers, LSA Global.]
https://lsaglobal.com/blog/3-performance-management-basics-for-managers/#

[Survey: Upskilling and reskilling, Workable, 2020.]
https://resources.workable.com/stories-and-insights/survey-upskilling-and-reskilling-in-2020/

[Delivering through diversity, McKinsey.]
https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/delivering-through-diversity

[Burnout and resignations are rampant in HR. What leaders need to know, Human Resource Executive.]
https://hrexecutive.com/burnout-and-resignations-are-rampant-in-hr-what-leaders-need-to-know/

[AI in HR: How AI Is Transforming the Future of HR, Gartner.]
https://www.gartner.com/en/human-resources/topics/artificial-intelligence-in-hr