Your employees are your most valuable business resources. Their skills and commitment determine whether your organization is a high-performer hitting its strategic objectives - or an also-ran that under-delivers.
To secure the talent advantage in a competitive market, it's essential that you have a systematic process for recruiting and retaining the talent you need - both now and in the future.
That process is staff planning. And we're going to tell you EXACTLY how to do it.
Follow the five steps below and you'll be able to create a staffing plan that prepares your organization for future success - through the optimal use of strategically-aligned human resources.
A staffing plan is a strategic document that sets out the number - and type - of employees you need to achieve your business goals. The staff planning process is typically conducted by HR professionals and is one of the core human resource planning processes.
A staffing plan assesses your current personnel landscape and determines whether you have the staff and skills you need for future success. It's about ensuring you have the right people in the right place at the right time - to achieve both short and long-term strategic objectives.
An effective staffing plan informs:
A staffing plan asks and answers the following questions:
A strategic staffing plan is a framework for future success. It is an opportunity to systematically review the efficacy of your current staff structure - from skills supply to resource utilization - to ensure your human resources are optimally aligned to business objectives.
If you think it is just about recruitment and skillsets, prepare to discover differently. Staff planning covers the entire employee lifecycle, including:
It enables businesses to deliver their business objectives and scale efficiently, by ensuring they have the exact resources they need for anticipated growth. Too few resources and you might fail to deliver your business plan. Too many resources and you'll go over budget on staff costs.
It also mitigates against business risk associated with poorly planned staff resources. Such as failed projects, customer dissatisfaction, inflated staff costs, and missed opportunities.
A thorough, research-informed staffing plan delivers significant benefits to an organization. These include financial benefits - like reduced staff costs - and operational benefits - like faster time to completion and higher customer satisfaction.
Increases productivity - A staffing plan increases productivity by reviewing resource capacity and utilization - and adjusting these to optimize performance.
Reduces staff costs - By optimizing your staff structure to fully utilize capacity - and reducing redundancy and idle resources.
Reduces recruitment costs - Through proactive employee experience, satisfaction and retention strategies - saving the cost and disruption associated with higher staff churn
Improves customer outcomes - By ensuring your organization has the right people and skills to deliver client projects - and to do this on-time, on-budget, and on-brief
Unlocks opportunities - By ensuring you have the capacity to seize opportunities that come your way - without sacrificing existing projects.
To determine your staffing needs, you'll need to complete the following five steps.
If you're not sure what that entails, don't worry. We're going to take you through it step-by-step. So you've got everything you need to create a robust staffing plan that paves the way for business growth.
The very first step in staff planning is to consult your organization's strategic business plan for the next year. What are the company's objectives and what are the potential implications for staffing? Some key business factors to look for include:
Mergers and acquisitions
Merging with another business could mean you have too many staff or staff with duplicate skills. This will require careful consolidation to maintain an efficient staff structure.
New products or services could create increased customer demand, which may require additional staff.
For example, updating your software stack or launching a second office. These invariably need staff to be recruited, redeployed, or reskilled.
Investing in new technology might result in lower staff needs thanks to automation and efficiencies - as well as the need to train or recruit staff to use the tech.
If your company is planning to expand its project portfolio - perhaps taking on more projects or serving a new industry - you'll need to resource plan for multiple projects. This might involve recruiting extra staff and managers or recruiting different technical skills and expertise.
You'll need to start by looking for any data you have on your current employees. This is easier if you use human resources software that centralizes employee information - such as role, skills, demographics, and performance metrics.
Analyzing the information below will help you identify opportunities and risks in your current staffing environment - and provide a strong steer for skills gaps you need to fill.
How many employees do you have? How are they distributed across the organization? Are they nearing retirement age? What are your maternity/paternity leave trends like?
Look at job descriptions to understand the current distribution of employees within teams, what duties people perform, the skills they were recruited for, and the experience they've had since joining your organization
Look at performance information to identify high performers who might be ready and eager for promotion. Note low performers who may need extra training and support to realize their potential. Watch out for MVPs who might get headhunted by other businesses - or dissatisfied employees looking to leave - as you may need to put a succession plan in place.
Your resource pool is all of the staff you have available to you. In project-based businesses, the resource pool lets portfolio, program, and project managers plan resources effectively. In staff planning, it provides a ready overview of staff skills, resource availability, and current utilization.
Look at your resource calendar to identify any over- or underbooking. If you have resources that are continually overbooked, they can become bottlenecks that delay project progress and undermine customer satisfaction. Overbooking is a red flag that needs addressing in your staffing plan.
If you see high utilization rates for a particular type of resource, you know their skills and expertise are in high demand. You may need to recruit more employees with a similar skillset or job role. A low utilization rate means this resource is in lower demand and can indicate redundancy in your staff structure. Idle resources incur labor costs without contributing sufficiently to the bottom-line - so this situation needs to be addressed. Creating a utilization report is a good way to predict future demand for staff.
Confirmed workload vs capacity
Another key metric is to compare how much work a resource is doing compared to the capacity they have. If a resource is not being utilized to capacity, there may be scope to reassign them to additional tasks or to restructure the team to reduce staff overheads.
Forecasting future staff needs is always going to involve educated guesswork. However, there are proven techniques to help make your staffing forecast as accurate as possible.
Trend analysis involves looking at your historical data to spot patterns in staffing over time. Look at trends in turnover, retirement levels, maternity and paternity leave... are these likely to remain steady or change?
Also look for past examples of when your business has undergone similar periods of growth or development. How has that impacted demand for staff? Have you taken on additional projects and needed more resources? Or have you introduced new technology that's streamlined your staff structure?
Ratio analysis predicts staffing demand and compares forecasts against industry standards. It doesn't rely on historical data, which makes it ideal for younger businesses. It involves establishing a ratio between two business factors - and then scaling it up according to your plans.
For example, imagine you establish a ratio between sales revenue and staffing. You currently make $200,000 a year and employ 10 staff. That's a ratio of 20:1, where one staff member equates to $20,000 of revenue. If one of your organizational goals is to increase your sales revenue to $500,000, you can predict you'll need 25 members of staff.
Consider the staffing levels of your competitors. How many staff do they have? Is that growing or shrinking? What are their job titles and roles? How do pay and perks compare to your business? This information can help you determine whether your staff levels and structure are in line with the industry - and predict how easily you'll be able to recruit and retain staff in the future.
There will be no shortage of reports predicting the future of your industry - from professional bodies and consulting firms alike. These reports can help you understand the direction of travel in your sector and the likely path your organization will follow.
Is demand for certain products soaring or slumping? Is new technology creating new job roles and skill requirements? Or is it making older roles obsolete? These insights and industry predictions can ensure you have the bigger picture when forecasting staffing demand.
The productivity ratio calculates how much work one employee produces and then extrapolates that to your future needs. For example, if you predict your organization needs to complete an extra 1,000 units of work - and you know each of your current employees completes 100 units of work - you know that you'll need an extra 10 employees.
The rule of thumb approach simply means you make assumptions based on your current staffing model. For example, imagine you need one project manager to effectively oversee every five project team members. If you plan to recruit fifteen new project staff, you'll need to make sure you recruit three more project managers too.
Finally, there's the Delphi method. This is an interactive process that iteratively develops ideas from a panel of experts. The experts submit their thoughts to a facilitator, who circulates an anonymized summary to all participants. The panel is then asked to revise their suggestions in light of insights from their peers.
In the case of staff planning, it may be that selected senior managers and external consultants are asked a series of questions about future trends in the industry. Their answers are then used to reach a consensus about the most likely impact on the organization and what that means for staff planning.
This step involves comparing your current staffing landscape and your future staff needs. Do they align?
This process can be complicated and it may help to use capacity planning software. This typically provides an overview of your resource pool, allows you to model different resource allocations, and surfaces capacity issues quickly.
Once you've identified your resource gaps, you can develop a strategy to overcome them, to support business continuity and growth. There are numerous ways and models for bridging staffing gaps.
Follow these five steps and you'll create an effective staff plan that puts your organization on course for future success. Your business will benefit from highly skilled resources that are aligned to your strategy - and optimized to deliver it in the most effective way possible.
Resource and capacity planning software can be highly beneficial in the staffing plan process. Software like Runn provides intuitive tools and dashboards that make staff planning quicker, easier, and more accurate.
It's important to understand billable vs non-billable work, because time that's not billed is time for which the company does not receive revenue.
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