Many HR leaders today are wrestling with how to structure a workforce that now includes AI as well as human capabilities. HR teams that can help build and sustain an AI-enabled workforce will have an opportunity to step into the spotlight as a key strategic partner to the business and lead the organization into the future. However, playing this role will require HR leaders to reimagine their strategies and approaches.
In this article, we review data on how HR functions are approaching workforce planning today. Strategic workforce planning has a lot of value to offer in a context that AI is rapidly reshaping, but relatively few HR teams leverage this approach. After exploring some of the reasons for this, we discuss three ways that HR leaders can reshape strategic workforce planning for an AI-powered workforce.
Related: HR leaders on workforce planning strategies that turn talent into a competitive advantage
A traditional HR solution
Strategic workforce planning provides an opportunity for HR to:
- look broadly at trends, scenarios, risks and opportunities related to the workforce;
- consider how these might hinder or aid the business;
- and set plans for mitigating workforce risks and securing the workforce needed to leverage business opportunities.
HR teams with a mature strategic workforce planning process will go beyond staffing open positions in a timely way. They will understand the organization’s AI strategy and work to get the right skills and capabilities in the right places to carry it out. For example, HR business partners might notice that employees in one part of the business will need training on writing AI prompts—and that they have experts in another part of the business who can help. With enough time and planning, the organization can move those experts where they can help address skills gaps, while also saving the business money by using in-house resources for training.
See also: HR’s problem isn’t capability—it’s capacity
We found that many HR functions are missing an opportunity to provide this type of insight and planning. Through a survey of more than 300 HR leaders, APQC found that fewer than half (44%) carry out any form of strategic workforce planning, whether in a specific business unit or at the enterprise level (Figure 1). Around half of our respondents (49%) said they only carry out operational workforce planning, which primarily looks at short-term headcount reconciliation and budgetary needs.
Operational workforce planning is undeniably important, but organizations that only carry out this type of planning are missing significant opportunities to think about the longer-term needs of the organization and take a seat at the strategy table.
Why strategic workforce planning is underused
Strategic workforce planning is not an easy or fast process to carry out. At a minimum, it requires HR to understand the business strategy, use analytics to conduct supply and demand gap analysis, and develop plans that address talent gaps and surpluses. We’ve found that a truly effective process also requires a deep understanding of the organization’s current capabilities, those it will need in the next three years, where the organization can buy capabilities in the marketplace and how internal and external capabilities are changing. Ideally, HR should carry out all of this work with enough lead time to use the right options to close specific gaps.
It’s a tall order, and many HR functions have less time than ever to invest in it. Given the pace at which AI is upending today’s business environment, it also makes sense to wonder if the effort to carry out strategic workforce planning is worthwhile. As these challenges have grown over time, even organizations with a history of successful strategic workforce planning are seeing the practice drop off in some or even all parts of the business.
3 ways to retrofit your strategic workforce planning process
As organizations continue to invest in AI, business leaders are going to want to see and sustain its benefits. This means that they may be more receptive than ever to HR being at the strategy-setting table and using strategic workforce planning to help build a future-ready workforce.
The business problems that strategic workforce planning aims to solve, at their core, have not changed—which means it still has the potential to deliver a lot of value for the business. However, many HR teams will need to retrofit the process for a workplace shaped by AI to get the most benefit. Below are three recommendations for how you can get started.
Get all of HR involved
Strategic workforce planning should not be the province of an HR specialist working in a silo. All of HR needs to be scanning the external environment, staying up to date about potential challenges and opportunities, and using this information to help the business make informed decisions about how to carry out work.
Organizations need the right support to make effective decisions about which skills to build, buy, borrow or automate in an AI-enabled workplace, and different areas of HR can help provide that support. For example, L&D can help organizations understand what skills are transferable with upskilling or reskilling and provide insights about the cost, time and other factors involved. Recruiting can provide intelligence about what skills are available in the external labor market, and at what price. When all of HR plays a role in guiding and informing these decisions, workforce planners have a broader range of options to draw from and can be more responsive to the needs of the business.
Clear the path for strategic HR work
One significant barrier to workforce planning is that HR business partners simply don’t have time to carry it out. Revisit what administrative or tactical work could be shifted to an HR operations or services team, and look for opportunities to automate high-volume, transactional tasks if you can.
Recruiting provides a good example of where HR can reduce administrative tasks to enable deeper strategic work. We found that at the median, recruiters spend 10% of their time answering basic questions from candidates about the hiring process. You don’t necessarily need to make significant investments in technology to free up more time for strategic work in this area—simple improvements to the process can go a long way. Providing more time across HR for strategy will clear space for a collaborative and continuous strategic workforce planning process.
Make it a continuous process
It’s no longer good enough to spend months gathering inputs and crunching the numbers for a plan that will rapidly grow outdated. We’ve found that the most effective workforce planners treat strategic workforce planning as a continuous process that is flexible and adaptable.
To the degree that you can, monitor indicators and milestones using real-time data to quickly detect where there is a need to change course. You should also have stakeholders meet regularly (at least monthly) to assess progress on action plans and review how workforce plans may need to change. Practices like these allow you to adjust the plan in real time as needed and build a process that is more proactive in the face of change.
Key takeaways
Strategic workforce planning has the potential to improve the agility, outcomes and performance of your workforce. Done well, it can be a key opportunity for HR to play a proactive role in driving AI-enabled transformation across the enterprise.
To take advantage of this opportunity, many HR teams will need to rethink strategic workforce planning for an environment that AI is already radically reshaping. This means:
- Taking steps to reduce purely administrative work and making time to continually gather strategic insights about your workforce
- Getting regular input and perspectives from groups across HR and involving them in the process
- Making workforce planning a regular activity rather than a big annual or semiannual event
HR teams that can build a more agile and responsive workforce planning process will help their organization achieve a competitive advantage through workforce readiness, solidifying HR as a valuable strategic partner.
Data in this content was accurate at the time of publication. For the most current data, visit www.apqc.org.
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