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Workforce Planning for Data, Technology and Analytics Teams

Workforce Planning Guide

Man in VR set

What is workforce planning?

Step 1 – The Backdrop

Step 2 – The Starting Point

Step 3 – Looking to the Future

Step 4 – Mind the Gap and Take Action

Step 5 – The Plan

Step 6 – Beyond the Planning

Stakeholder Management

According to a 2021 CIPD survey of its members, two thirds of businesses say that they take an adhoc approach to recruitment and less than half have a workforce strategy based on data driven understandings of current and future workforce needs. In fact, just 23% of respondents collected data to forecast hiring needs. 30% of respondents reported that their CEO had talent management as a key priority (a fall from 54% in 2017). As the economy fluctuates, and with Brexit, IR35 and the recent Pandemic affecting recruitment drives this guide will help you understand how to think strategically about your workforce, why taking this approach will help your start-up, scale up or enterprise business thrive around people management and which steps to take to implement a successful plan of action.

What is Workforce Planning?

Very simply, workforce planning involves understanding the workforce needs of the now as well as the future, through a series of analysis around business growth, objectives and skill gaps. It also means understanding the persona’s, profiles, skills and attitudes of the people you want to hire and of the existing team. Comprehensive planning does not involve a one step process and the activities involved can become quite complex, encompassing succession planning, flexible working, demand supply forecasting, skills audit gap analysis, talent management, role design, risk management, outsourcing, career planning, scenario planning and multi-skilling.

Woman in VR headset

Operational v’s Strategic workforce planning.

Operational workforce planning focuses on a shorter time frame (typically 3-12 months) and is used as an everyday “business as usual” workforce monitoring tool. It focuses on the numbers and addresses the future plans of the business through the use of existing and historical data and projecting forward the needs of the business.

Strategic workforce planning involves gaining wider insights into the relationships that affect the talent landscape. It is fully aligned to the business strategy and takes a holistic approach to assessing and analysing internal business drivers and goals. Taking a more qualitative approach, a business is able to evaluate a range of options that identify and maximise the drivers of performance.

Both approaches are needed to give a fully rounded view of the talent landscape within the business and wider market.

Shifting markets

The concept of workforce planning is not a new one. What has changed however is the evolution of methodology. It used to be more adhoc, more event based: a need arose, and the analysis and planning began. Now however, for businesses to be consistently agile and proactive around the needs of their clients an aligned resource allocation plan is required, one that also includes the changes that are occurring in the wider markets a business operates in. Our recommendation is to bring in expert talent solution providers at the point of planning, way in advance of your need. This ensures you receive live market information and guidance at the right time and secures a smoother hiring strategy.

woman looking at digital whiteboard
Process steps from CIPD for workforce planning

Although it can be useful to break the process down into a series of steps, remember it is an iterative process that should be constantly monitored. The diagram above is taken from the CIPD and demonstrates the best approach to take when thinking about the topic holistically. It is also important to think about 5 key areas when addressing workforce planning. Those 5 areas cover whether the business is the right size (the number of people to jobs/services ratio), the right shape (managers to team members, demographics, admin to sales etc), with the right skills (capabilities to meet business goals), in the right location (availability of the right people in the geographies needed to meet business goals), at the right cost (an effective employee/cost ratio – ensuring benchmarks are in place for salary and benefits, training budget recruitment costs and mobility if necessary). All these need to be front of mind when workforce planning to ensure delivery of business goals and avoidance of redundancies.

Step 1 – The Backdrop

Getting organised

Understand the organisation and its environment – THE BACKDROP TO YOUR DATA

PESTLE
COMPETITOR
EVP
BUSINESS PLAN

 

Pestle analysis (Political, Economic, Sociological, Technological, Legal, and Environmental) is often used to help provide a higher-level overview of the backdrop to issues that may affect your recruitment and retention drives as well as workforce plan. One example for “political” might be whether there are there any tax changes that will affect the team. An “environmental” example might be considering whether it is graduation time and therefore a ready pool of junior talent is coming onto the job market. Competitor analysis will tell you whether your EVP is up to scratch, how many employees they have, where they are advertising roles and whether they are letting people go (as this may be a ready pool of mid to senior candidates). The business plan will inform the people strategy and provide a full picture of what skills are needed to execute on the plan or whether outsourced talent is required. Analysis can then be done using existing internal workforce data as to which internal moves could help with the skills or resource shortage. Are there new territories, sectors, services that will be launched? Is there real ambition to grow market presence? These pointers taken from the business strategy are key to workforce planning because you will know what skills and how many people are needed or whether some of the gaps can be filled internally.

Step 2 – The Starting Point

 

Step 2 Analyse the current and potential workforce: THE STARTING POINT

AGE
DEMOGRAPHICS
SKILLS
TENURE
TURNOVER
SICKNESS LEVELS
EVP & WHAT ATTRACTS PEOPLE TO YOU
WHAT KEEPS THEM
WHAT WORKS RECRUITMENT WISE
EXIT INTERVIEW INFO

In order to be able to plan effectively you need to know the current make up of your workforce.

This involves analysis of data around:

  • Age of current workforce (for anyone reaching retirement could you put flexibility in place for those wanting to stay but step down the hours?)
  • Demographic make-up of the workforce (how diverse is your team?)
  • Skills of the team (does anyone need upskilling for: development/retention/promotion/innovation/shifting markets that you serve/gaps that exist that require new talent bringing in from outside)
  • Tenure of the team
  • Where you successfully recruited from in the past
  • Why are people attracted to your business?
  • Why have people stayed in the business for as long as they have?
  • Analysis of turnover (at what point do people leave)?
  • Exit interview analysis
  • Sickness levels (for understanding wellbeing of team, job satisfaction)
  • What does your EVP look like? (analysis will tell you if this is competitive or not)

 

Segmentation: ORGANISING YOUR JOB FAMILIES
Now you understand the current make up and information surrounding your team it is helpful to segment the workforce into job families: where people with different job functions but with similar skills, knowledge and capabilities are grouped together. This helps with salary benchmarking, as well as helping to clearly define job roles and responsibilities.

At this point completing further analysis of each segmented group, looping in environmental information such as location of job families, and job functions, demographic differences of the segmented workforce and contract types within the functions will give you the micro data needed to be as agile as possible when it comes to forming the team into the right size and shape for current market and business needs.

As people leave or join it is important to keep up to date with these changes and understand how each addition or subtraction affects the age, gender, skill set, tenure etc of the workforce.

Step 3 – Looking to the Future

 

When considering future workforce needs it can be helpful to think about a few different areas. The following questions will help you define needs.

  • Is the company currently actively right sizing? (shaping the workforce to real time business needs).
  • What product/service lines are being planned? and how does this correlate to upskilling of existing staff? And can this be done in the required timeframes (some skills may take a few years to develop in relation to product/service speed to market for example).
  • Are these product/service lines different across the organisation and therefore have different time scales against them?
  • Location (are the correctly skilled people available in the area for any potential growth into new territories?)
  • Shape of the workforce (composition of structure – ratios of managers to team members, demographics)
  • What skills are available (aligned to business plan and current gaps)
  • Size of the workforce (number of people to jobs/skills needed to deliver business plan)
  • Cost (employee/cost ratio, also benchmarking pay and reward, training, L&D, professional development).
  • Required technology updates (training, skills, new resource)

When linking the business plans to the workforce think about the effects of any planned changes to skills, workforce numbers, locations, work patterns and contracts of employment.

 

Example Methodologies for assessment:

ZERO BASED DEMAND ESTIMATION

SCENARIO PLANNING

CONTINGENCY PLANNING

There are a few different methods you can use when assessing future workforce needs. A great starting point is to simply ask Managers what they think they will need. Beyond that there are a variety of other approaches available.

Zero Based Demand Estimation: This approach ensures that a business creates workforce plans based on what they would need if they were starting from scratch rather than repeating old patterns. Often businesses can be blinded by what they have done historically or by what they currently have and this new way of thinking can unlock previously unthought of but effective and efficient solutions.

Scenario planning is another effective way to help with workforce planning. It can be especially useful for more volatile markets where it is difficult to predict long term needs. A series of scenarios are created based on certain market drivers and managers are presented with an “if this happens then what?” series of options to feedback on. They are asked to identify the differences rather than choose particular options so that models can be tested to see where workforce decisions would need to change in order to deliver on business plans.

Contingency planning helps a business understand what they would be able to do if something major were to happen. For example if a major account was lost could they afford to keep the current workforce or would they need to downsize or turn to contingent workers.

Step 4 – Identifying workforce gaps against future needs: MIND THE GAP, TAKE ACTION

All the information that you have gathered above will help you identify any gaps that the analysis may have uncovered. These could be areas where skills are lacking so more people are needed to fulfil the function or so-called negative gaps where you have too many people in a type of role vs need and therefore may need to redeploy teams to other areas of the business. Any functions that may be difficult to hire for should be given their own category and alternative filling methods looked at (for example apprenticeships or building strong school/graduate pipelines) alongside expert/niche recruitment partnerships. Pulling together the information around these areas and completing the process for all job groups will show you any similarities as well as differences across the organisation and it essentially forms the foundation of your workforce plan. You then need to create action points for each area.

Step 5 – Summarising all the data: THE PLAN

 

Pulling all the information together, either in a specialised platform or a simple spreadsheet will show you the groups, the needs, the state of the current workforce, any resourcing issues or risks and the priority actions that need to be taken. This can be organised as per the example table below.

Job Group Future Staffing Needs Current Workforce Resourcing issues/risks/gaps Actions to mitigate risks
Data Engineering Steady growth as planned against business objectives: 6 hires over 12 months
Further 6 hires during year 2
2 senior team members due to retire in next 3 years, currently a gap within middle management ready to move into SLT Very competitive labour market Talent in short supply

Current need to grow our own into senior-career levels

Professional development programme for key existing  individuals

Specific search and selection partnership to find difficult to hire talent

 

 

You now have the ongoing data collection process for analysis, the backdrop, the job families and analysis of gaps and the plan itself.

Step 6 – Beyond the planning

The plans are iterative and need to be reviewed continually to ensure they are fit for purpose. Certain questions can be asked to gauge the effectiveness of actions taken:

Are the planned actions still relevant in the current market?

Have we executed on plans made previously (and depending on the answer to the above question, do we need to?)

Is the data being captured on an ongoing basis and is it accurate?

What is the impact of any changes we have made?

Regular feedback loops between stakeholders ensure that communication is flowing and is of benefit to all parties. Managers will benefit from information around current workforce data, numbers of unfilled vacancies, staffing costs v’s business growth, upcoming workforce challenges such as resignations, – succession planning, starters, leavers and areas to address from employee surveys etc.


Formulas often used in workforce planning

 

Example one: Cost of benefits and employee programmes

Benefit cost=total cost of benefits and programmes/average number of employees

Benefits ratio=Benefit cost/total pay

Example two: Total employee cost

Total employee cost = (1+benefits ratio) x total pay


Example three: Revenue per employee

Revenue per employee=average number of employees/top line revenue

Example four: Tenure per employee

Date of Vacancy opened

 

Date of Hire Time to Fill
12/07/2022 11/08/2022 =NETWORKDAYS(then cell number of date of vacancy opened,cell number of date of hire)

 

This formula (Networkdays) in excel returns the number of whole days between two dates.

Example five: Cost per hire

To find out cost per hire you need to calculate a few different variables.

Cost of covering an open vacancy Salary x days to fill + allocated overtime
Talent Acquisition time to source, screen and interview candidates (Talent Acquisition hourly pay + benefits ratio) x hours
Manager time to interview, evaluate and select candidate (Manager hourly pay + benefits ratio) x hours

 

Example six: Yield ratio (this tells you how effective your hiring function is)

Yield ratio=applicants at step/applicants at previous step

Example seven: Hiring Velocity (not the same as time to fill as this looks at how quickly the process moves at each step. Any delay at a critical time can lead to candidate ghosting)

Here are the formulas to use

In time between action row use DATEDIF(notice of open vacancy,posting of vacancy,”d”) – gives you 4 in this example. Then DATEDIF(posting of vacancy,applications,”d”) – gives you 13 and so on.

 

We would recommend using the expertise of a truly niche specialist talent solution provider to help you plan your data, tech or analytics teams and to utilize these skills at the point of planning rather than at the point of hire. We have helped clients avoid costly mis-hires where they have perhaps focused on the wrong role initially. When scaling a team there are certain roles that will help the function grow in line with business objectives and this is something we can help you understand as you formulate your hiring plans.

Gaining buy in – Stakeholder management

In order to execute on the plan you need to ensure alignment of objectives amongst key stakeholders

Stakeholder management is a key component of the plan and one that needs some consideration to get right. Being aware of some of the biases that can arise when a proposition around workforce planning is presented to stakeholders can be helpful, here are 4 that can commonly arise: anchoring, attribution substitution, the availability heuristic and pro-innovation bias.

Anchoring: Is when people rely heavily on one piece of information when making a decision. For example, if, when organising a meeting to discuss workforce planning, diversity is mentioned as one of the reasons to plan, a person can focus too heavily on that one aspect of the whole concept and the meeting can get anchored to that one concept.

Attribute substitution: This is where the complexity of a situation is substituted for a simpler element. For example, in the case of diversity, someone introduces the idea of gender as a way to improve the diversity of a workforce rather than understanding the wider issues around neurodiversity, socio-economic backgrounds, education levels, race, disability, full inclusivity etc.

The availability heuristic: is where someone favours one option over other alternatives because they can only recall that option, someone they know took that approach or they themselves have previously used that method.

The pro-innovation bias: is where a stakeholder has such a strong preference for one method over all other options to the point where they can’t see any weaknesses in their preferred process.

Any of these biases usually mean that a stakeholder has either seen that another organisation has taken this approach before and they want to copy it, or they themselves have done it in another organisation. Some think that the action they want to take will solve the problem and addresses the challenge being presented when in fact it doesn’t because they are unable to see the wider picture.

Relationship building and influencing skills are therefore required for successful stakeholder management in order to be able to challenge the bias or pivot to a new action point.

Depending on the people involved there will be different levels of interest and engagement in the initiative. It is best to work this out before presenting information to the different parties so that you can get the best out of them.

It is useful to think of the stakeholders sitting within a matrix of power and interest levels.  A person can have high power and low interest for example. It is useful to think of the matrix as being populated by latents, promotors and detractors, apathetics and defenders and attackers.

The diagram below shows this in more detail:

Stakeholder diagram workforce planning

As you can see Apathetics have low power and low interest in the topic. These people can usually be influenced or engaged via normal comms.

Latents have low interest but high power so it’s important to make sure the communication they receive meets their needs as quickly as possible.  Consultation around what information they need and when will help with engagement.

Attackers have low power but high negative interest, defenders on the other hand have high positive interest. Attackers can reduce the ability of defenders and recruit apathetics so it is important to engage defenders so that they can neutralise negative opinions.

Promotors and detractors are key stakeholders to engage with because they have high levels of power and interest. The earlier you can identify these stakeholders the better and engagement and regular consultation is important. To manage detractors, you either need to focus on keeping promotors onside so that they can neutralise negativity, convert latents into promotors or ideally convert the detractors into promotors.

Mindset

It is important to help managers and the stakeholders involved in workforce planning understand that certain mindset attributes are helpful throughout the process and that it isn’t just a process.

Here are a few attributes that will be helpful in the process:
Scenario planning
Business alignment
Being future focused
Being evidence based
Utilising segmentation of job families and business critical roles
Understanding and challenging demand assumptions
Understanding people capabilities and development
Risk mitigation

For information on how KDR can help you to attract the right candidates to your data, technology or Analytics teams contact us at enquiries@kdrrecruitment.com or call +44(0) 1565 651 422.

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