Workforce planning—preparing your business today for the workforce of tomorrow

08 March, 2023

Shifts in technology, workforce demographics, automation of jobs and pressures on staffing budgets are just some of the trends shaping the workforce of the future.

To effectively determine future workforce requirements, longer planning horizons are needed. In addition, businesses need to align strategy choices and workforce implications with reliable workforce data and analytics capability to ensure that both the number of staff and the required mix of skills and capabilities are considered.

A mature approach to strategic workforce planning, coupled with meaningful people analytics, will help leaders make informed decisions about their workforces for the long-term.

Trends affecting the workforce

Technological breakthroughs

Emerging technologies are redefining how we interact with the workplace and each other.

Climate change and other megatrends

Global megatrends such as climate change are influencing what people want from businesses.

Demographic shifts

The changing demographics of the workforce demand more focus on wellbeing and ethics.

Automated roles

Automation of jobs is impacting the types of roles available.

Polarised connectivity

We are simultaneously more and less connected than ever.

Implications

If organisations fail to give longer-term, strategic workforce planning adequate attention, the effects of current workforce trends will be felt more broadly, rather than being limited to localised workforce challenges.

Organisations

Workforce planning is an essential part of an enterprise planning approach. Leaders must consider what capabilities will be required in the future and have firm plans for developing, buying or borrowing talent to ensure they can deliver against their strategy.

Competition for the right talent remains tough. Without an appropriate focus on scenario planning and impact modelling, organisations could fail to consider a range of external and internal drivers. This would, in turn, increase their workforce risks.

In the absence of a clear plan, organisations may continue to make short-term decisions based on affordability without considering long-term capability requirements.

Employees

All roles will be affected by change over time—the question is: to what degree can this be effectively managed to minimise adverse effects on the workforce?

Digital transformation will profoundly affect the types of roles, business processes, customer behaviours and ways of working within our organisations. Leaders must ensure that their workforces are future-ready. By clearly understanding their current and future workforce capability, they can determine workforce gaps and implement strategies for skills development.

Reassuringly, PwC’s 2022 Global Workforce Hopes and Fears Survey results show that companies are investing in their workforce through upskilling, with 40% of employees indicating that their employers are upskilling workers to address labour shortages.

Key considerations for effective workforce planning

Below are some key factors to consider from a workforce planning perspective.

Focus on workforce capability, not just affordability

Increasing or decreasing the size of a team to achieve budgeted staffing levels is too simplistic. There must be a focus on critical capabilities. Ask yourself:

How will the organisation’s strategy or operating model change over time?
How will this affect workforce demand in the short, medium and long-term?
What are the identifiable and material gaps between supply and demand for critical skills and capabilities?

Plan for the future through workforce scenarios

Leverage ‘what if’ scenarios and determine workforce capacity and capability implications for each scenario.
Scenarios highlight the talent gaps that may arise when different events occur and when workforce decisions are made.
Considering potential future outcomes is a key enabler for business leaders and decision-makers.

Consider the total workforce

Both employees and contractors need to be considered in determining workforce supply.
Agile workforce practices will mean that organisational effectiveness relies on the ability of a blended workforce to come together to solve complex problems, regardless of individual employment arrangements.

Assess what’s required to move beyond operational to strategic

A shift from operational to strategic workforce planning won’t happen overnight. It is a critical business capability that must be developed and built over time.
With commitment, support and a focus on improving the approach and alignment to strategic planning, improvements can be made to enable business strategy and increase workforce agility.

Consider how you position your leaders to respond

Workforce planning cannot be seen as HR’s responsibility alone. HR is the natural custodian of the approach, but for strategic workforce planning to be effective, it must be owned by the business.
Empowering your leaders to take ownership of their workforce affordability and capability challenges and holding them accountable for their decision-making outcomes are tangible levers organisations can pull. They will ensure that leaders across the organisation work together to make informed decisions that consider the impact on the business, employees and society.

The future does not need to be feared, merely planned for

There is no doubt that the workforce of the future will look very different to the one we see today. Workforce planning is no longer only for select organisations with unique operational requirements.

To ensure you are on the front foot to meet this change, regardless of your organisation’s or department’s size or focus, we recommend using strategic workforce planning to guide your talent strategies and plan affordable workforces without compromising on capability.

The key actions to take now

To mature your workforce planning capability and look further into the future, we recommend taking action in four areas.

1. Align business strategy and capabilities to your workforce strategy

Workforce planning should be done alongside business planning in a two-track process. One is operational and aligned to business and budget planning, and the other is a longer horizon, data-driven, strategic sweep that accounts for seismic shifts in workforce supply and demand. The second track must forecast the impact of changes in the environment—including technological, generational and cultural—and define the required future workforce to meet these challenges.

2. Look for iterative improvements to your workforce planning process

For organisations with workforce planning processes in place, analyse the strengths and weaknesses of your approach and look for opportunities to improve. The key is to concentrate less on cyclical workforce planning processes and more on continuous improvement to the overall approach. Value comes from embedding processes, measuring outcomes, digitally enabling the process wherever possible, using better data and building your workforce planning capability.

3. Accelerate the development of critical capabilities

Once you have identified capability and capacity requirements, a tactical approach is essential to accelerate the development of critical capabilities. This means having a robust action plan to develop, buy, or borrow to address capability gaps. Successful organisations accelerate the development of critical capabilities to maximise investments and carefully consider the breadth of available reskilling, upskilling, and employment models.

4. Build confidence in your data to power your people-focused decisions

Data-based insights can tell you a lot about your people and drive better decisions at every level. However, data is rarely harnessed and taken from analysis to action. HR must take the lead in building confidence in data across the employee lifecycle. With the right data, you can create simple but powerful models to scenario plan and predict future needs.

We are here to help you

Having the analysis and insight required to make the right people and organisation decisions is more important than ever as businesses prepare for the workforce of the future and navigate disruptive megatrends, including changes in workforce demographics, technological shifts in how we work and global economic uncertainty. Using PwC’s Strategic Workforce Planning approach, we can help you proactively analyse your existing workforce supply and future demand to build the required capabilities and capacity to achieve business objectives. To discuss any of the above, please get in touch today.

Contact us

Gerard McDonough

Partner, PwC Ireland (Republic of)

Tel: +353 87 224 1517

Ger Twomey

Director, PwC Ireland (Republic of)

Natasha Finn

Senior Manager, PwC Ireland (Republic of)

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