Thinking Strategically About Your Workforce Needs

The headline numbers each month from the U.S. Bureau of Labor Statistics focus on the number of net jobs added to the economy—and the unemployment rate, job openings, wage growth, and inflation.

Don’t get overly distracted, however; that’s the statistician’s world. It’s a look in the rear-view mirror. But those who run or manage companies need to focus on the future, and a big part of that future will be workforce needs: making sure, through strategic workforce planning, that you always have (or have ready access to) people with the most-critical skills your organization needs, even as those needs change.

The big question marks are: What will those skills be a year, two years, or five years from now? And where will the talent come from?

Strategic Workforce Planning

That’s where strategic workforce planning comes in.

Strategic workforce planning is not “Part II” of your overall strategic plan. It doesn’t come after your strategizing and planning are completed; it needs to be part of the process. The workforce component should help inform other critical decisions; without it, strategic planning easily can become wishful thinking.

As the Amsterdam, Netherlands-based Academy to Innovate HR explains, strategic workforce planning is the ongoing process of evaluating an organization’s talent needs, “identifying gaps … and developing a methodical people plan” to ensure the organization has “the employees, skills and knowledge needed to meet current and future business goals” based on its long-term strategy. The plan, of course, also needs to be agile enough to accommodate “unexpected events and changes.”

Such agility, suggests Ross Sparkman, Senior Director of Workforce Strategy at Walmart, and author of “Strategic Workforce Planning: Developing Optimized Talent Strategies for Future Growth,” comes from two main sources: 1) the willingness to analyze and use data to make decisions, and 2) support from the top. “You need to be able to make decisions and you need to have that support from the leaders on those decisions,” he said in a Talent Economy interview several years ago. If you don’t have that support, “you’re just never going to have an effective workforce planning function.”

New technologies such as AI and generative AI (GenAI) can speed up and refine the analytics, helping to assure the soundness of this critical part of your plan.

Skills, Mobility, And A Better Future

Many experts and organizations, ranging from the Forbes Human Resources Council to the World Economic Forum, routinely provide predictions about the job skills that will be most in demand in the future. But none of them can forecast your company’s needs.

With U.S. and global businesses being impacted by accelerated digitization, AI, climate change, ramped up energy demand, competition for rare-earth minerals, political uncertainty, and other largely external factors, what comes next? How is strategic workforce planning even possible?

To answer that question, Jens Baier, my go-to expert on talent strategy, suggests that leaders think in terms of skills, rather than job descriptions. Workforce planning, he stresses, has far less to do with the number of people your organization employs than whether those people have the right capabilities and are prepared for what lies ahead.

“The future of work isn’t built around job descriptions, organizational charts, or titles. It’s built on skills. Roles are static. Skills are dynamic.” Baier notes that “workforce planning often starts after strategic planning ends.” That’s backward, he said.

When a company makes a consequential decision, such as launching a transformation, moving into a new market, or changing its business model, its workforce needs change. Skill-based workforce management ties business and people strategy together. “It lets you see where talent is blocking strategy,” Baier says, giving leaders a full range of options: whether to hire, upskill, partner, outsource, or automate.

To determine if you’re prepared, you need a clear-eyed, organization-wide assessment that goes beyond existing job descriptions and team structures.

I’m not talking about a catalog of every individual competency, but a focused skills inventory that reflects

• where your organization is going,
• the skills your employees already have,
• the skills that are in short supply,
• the existing skills that are becoming less valuable, even obsolete, due to technological or organizational change, and
• the skills that will be needed in the future. This is the tough one.

Importantly, such an inventory also will indicate where reskilling can be most beneficial—not only to your organization, writ large, but to your employees. After all, reskilling provides mobility and for many it’s their ticket to a better future, enabling them to assume new roles based on capability, not title.

This means aligning hiring, learning, upskilling, and mobility with long-term business needs.

The Challenge Is Execution

The biggest challenge, however, is execution, Baier stresses. This often requires a cultural shift—from managing people based on the boxes and silos they occupy (job title, job description, company unit and department)—to more-flexible arrangements, “based on what they can do and what they can become.”

The process may sound simple, but it involves many moving parts. Here, according to Baier, are the key elements:

• Map your organization’s most-critical skills. “Focus on the capabilities that drive your competitive advantage.”
• Model future needs. “Scenario planning isn’t just for supply chains; apply it to skills.”
• Invest in mobility and reskilling. “The fastest way to fill gaps may be to unlock the talent you already have.”
• Tie skills planning to strategy, not just hiring targets.

As Baier stresses, “Skill-based workforce management isn’t about predicting the future. It’s about being equipped for it.

“In an economy defined by volatility, the winners won’t be those who hire the most. They’ll be the ones who develop, redeploy, and retain skills the fastest. Because strategy doesn’t fail when ideas are wrong. It fails when teams can’t execute.”