What Is Operational Workforce Planning and Its Importance?

September 9, 2022

“Without goals, and plans to reach them, you are like a ship that has set to sail with no destination.” ― Fitzhugh Dodson, an American psychologist and educator.

Rightly said. The same applies to a business scenario. Every organization is driven by strategic long-term goals and objectives. While a strategic plan is undeniably essential for a company to sustain and grow, it doesn’t suffice alone.

Every firm should streamline its day-to-day operations and break the company-wide plan into quarterly, half-yearly, or annual goals. Besides, these objectives can be further categorized into team or department-specific goals to achieve a long-term vision. This is where operational workforce planning plays a pivotal role as it complements the company’s strategic plan.

This blog explains the importance of operational planning and elucidates the steps to create a robust operational plan.

But first, let’s understand:

Enhance Operational Workforce Planning Increase Business Efficiency

1. What is operational workforce planning?

Operational workforce planning is the process to achieve an organization’s short-term goals and objectives, generally set for a span of the next six months to two years. It also comprises tracking day-to-day operations, assigning people to meet immediate resource demands, and addressing ad-hoc changes to enhance operational efficiency.

Operational planning helps transform the enterprise-wide strategic goal into a comprehensive map composed of several components. This map, commonly referred to as an operational plan, documents unit-level objectives that must be achieved within a definite timeline.

It is prepared by HR and mid-level managers (team leads, department heads, etc.), and enables them to achieve targets for the next one to two years.

Operational plans can further be divided into two basic categories.

  • Single-use plans: Also known as specific plans, they are created to achieve one-time business targets. For example, Let’s assume that a company is ready to launch a new product/service. Now they will create a single-use plan detailing how they will introduce the product on the market.
  • Ongoing plans: They are built to address issues that are repetitive or take longer to resolve. For example, a plan to increase the sales team’s overall efficiency by eliminating redundant processes involved can be considered an ongoing plan.

Let’s understand operational workforce planning better with the help of a real-life example of an IT industry.

An IT company has to cut down on its labor costs by 20% in the upcoming fiscal year.

So, what can operational workforce planning comprise?

It can encompass measures like:

  • Going beyond matrix boundaries to hire global and cost-effective resources.
  • Creating the right mix of senior and junior resources to control project resource costs.
  • Establishing a fine balance between permanent and contingent workforce to reduce unnecessary overhead costs.
  • Implementing resourcing techniques like the outrotation-backfill strategy to combat resourcing constraints and fill critical positions without hiring critical and niche-skilled resources.
  • Providing shadowing opportunities for freshers or less experienced resources whose charge-out rates are comparatively lower to reduce resourcing costs.

Ways to Mitigate Common IT Project Risks

Now that the concept of operational workforce planning is clear, let’s understand how valuable it is for an organization.

2. Importance of operational workforce planning

A company cannot achieve its strategic goal unless it focuses on meeting its short-term goals. Operational workforce planning plays a crucial role here as it provides the following benefits.

A. Helps define individual roles and responsibilities

Operational workforce planning helps determine the tasks or activities involved to reach milestones. Managers can then select the right candidates for each job and define their roles and responsibilities accordingly.

It helps employees get a better idea of what’s expected from them and how their efforts contribute to achieving the organizational goals. As a result, their accountability and engagement go up, thereby enhancing their work commitment and productivity.

B. Creates the right mix of permanent and contingent employees

An operational plan helps analyze immediate skill requirements, find out if they are one-off in nature or not, and assess the budget required to fulfill them. Based on that, managers can hire permanent or contingent employees or create a judicious mix of both.

For example, a new banking project requires Abinitio and Java skills. While Java developers are already there, the firm doesn’t have AbInitio developers. Moreover, as Abinitio’s resources are expensive and scarce, hiring them on a full-time basis for just one project isn’t economically feasible. So, the company here can build the right mix of permanent Java developers and on-demand Abinitio developers. This will enable managers to control the project’s cost and complete it successfully.

Contingent Workforce and Its Importance

C. Enables tracking of day-to-day operations

Operational planning helps outline the day-to-day activities and processes necessary for running an organization. The ability to visualize daily operational activities helps track them effectively and determine if there are any negative cost/time variances.

In case such variances are found, managers can take course-corrective actions ahead of time and mitigate them. It also helps keep all the initiatives adequately staffed with the right resources and keep them on the right track to ensure that they contribute to the final goals.

D. Addresses immediate project demands

As discussed above, operational workforce planning also entails planning for short-term objectives and goals. It provides insights into immediate skill demands across various projects.

Accordingly, managers can implement suitable internal resourcing measures like inter-departmental resource sharing, deploying benched resources, etc. They can also initiate external resourcing measures like project-specific hiring or recruit permanent or contingent resources as appropriate.

E. Manages seasonal workforce demands

Various businesses face peak seasons where resource demands go high.

An effective operational planning strategy helps foresee these surges in resource demands (or ramp-ups) across an organization and handle them well.

For instance, in the accounting industry, the demand for resources reaches its maximum near the closing of a financial year. Using operational planning, HR managers can predict the rise in the demand for auditors, accountants, tax analysts, etc. They can then initiate suitable staffing measures, like hiring, training, etc., to manage these skill demands, thereby ensuring high client satisfaction levels and profitability.

Given the importance of operational workforce planning, the following section gives you a step-by-step guide to creating an efficient operational plan.

3. How to create an effective operational plan?

Operational workforce planning can seem challenging for beginners or even seasoned professionals at times.

Nevertheless, you can always follow these steps to create a robust operational plan.

A. Break down your long-term vision into deliverable milestones

Creating a strategic vision for your company is the first and foremost step towards operational planning. Next, one should break that long-term company vision into small achievable milestones distanced by a certain period, say a month, quarter, year, etc.

Let’s take a hypothetical example. A multinational automobile company aims to grow its US customer base by 400% over the next ten years. For this, it has decided to increase its customer base by an average of 40% every year, which becomes a milestone.

Project Milestones and Their Importance

B. Assess the immediate and future project requirements

After defining the milestones, operational workforce planning entails assessing the skill demands of projects and the tasks involved in delivering them. In the example above, the milestone of an average 40% yearly increase in the customer base will need extensive digital marketing campaigns, social media promotion projects, advertisement campaigns, and so on.

For that, the company needs a team of marketing strategists, SEO experts, graphic designers, PPC experts, and sales executives. In addition, the company also needs manufacturing engineers, workers, etc., to cater to an increased consumer base.

C. Get visibility into resources’ skills and competencies

Once requirements are established, managers must look into their talent pool’s skills and competencies and assess them thoroughly. It will help them get an idea of where they stand in terms of resources required to meet deliverables.

Continuing the example above, managers find that they currently have all the resources required in terms of number and skills except PPC executives and manufacturing engineers. This assessment gives them insights into their resource pool’s current position.

D. Identify and bridge the skill gaps

After assessing the current talent pool, the next step is identifying and determining the skill gaps that need to be filled. The assessment of the skill gaps reveals that the company needs PPC executives to fill the skill gaps.

The company can now leverage internal/external resourcing channels. They can hire these required resources on a permanent basis or outsource the work as appropriate and the budget allows. Training programs can also be a good idea to develop PPC skills in freshers. For fresher engineering graduates, on-the-job training and shadowing opportunities can help turn them into successful manufacturing engineers.

Retraining/Upskilling Future-Proof Your workforce

E. Monitor and control

After mapping out the operational plan, the next step is executing and monitoring it continuously to ensure it is in the right direction. For that,

Managers can decide on certain performance indicators in terms of milestones, timelines, budget, etc., and track the plan accordingly.

Additionally, owing to the evolving market demands, seasonal peaks and troughs, or customers’ changing preferences, an operation plan needs to be revisited and changed, if required. Also, if the plan faces any roadblocks in meeting KPIs, managers need to take measures to eliminate them and achieve operational goals.

So, it is evident that following the above steps can help you form an operational plan. The next section elucidates how a robust resource management solution can help enhance operation workforce planning.

4. How can resource management software improve operational workforce planning?

Resource management software helps enhance operational planning in several ways. To begin with, it provides foresight into pipeline projects’ requirements and helps analyze them.

The next important functionality is enterprise-wide visibility into resource profiles and attributes. Managers can leverage it to assess the existing talent pool skills, competencies, etc., and compare them with upcoming requirements to find the skill gaps.

They can further check the existing employees’ schedules and find out whether they can be made available to fulfill upcoming skill requirements or not. Accordingly, the managers can initiate suitable resourcing measures to bridge skill gaps and meet current and future demands effectively. It also helps create the right mix of a contingent and permanent workforce.

Companies that face seasonal peaks in resource demands can benefit from it more as managers can assess demands and determine whether they are one-off or recurring every year. Based on that, they can decide whether to hire permanent or contingent resources or a mix of both and reduce overhead costs.

5. Conclusion

Operational workforce planning is a stepping stone to accomplishing a firm’s strategic plan. It paves the way to achieve the company’s vision in a step-by-step manner by accomplishing short-span goals and milestones. It also gives clarity of organizational goals to every employee, facilitating better teamwork and collaboration, thereby increasing productivity.

Therefore, one must leave no stone unturned in streamlining it. Though it may seem like a daunting task, following the right approach as explained above and leveraging the right resource management solution can help perfect your operational planning.

So, are you ready to transform your operational planning and reap its benefits?

6. The Glossary

The Glossary

7. The SAVIOM Solution

SAVIOM has over 20 years of experience helping multinational clients manage their resources efficiently and effectively. With over 20 years of experience, this Australian-based MNC has a global presence across 50 countries and has helped 100+ clients meet their specific business goals. SAVIOM also provides tools for project portfolio management, professional service automation, and workforce planning software. So, SAVIOM can help your business to establish an efficient system geared towards your specific business challenges.

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