The surprising rebirth of strategic workforce planning

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11 Mar 2024

Duncan BrownDr Duncan Brown, Principal Associate

Last week, over a cheeky glass of wine, I was lucky enough to share our latest IES research on strategic workforce planning (SWP) at a meeting of the European HR Directors’ Circle in London. The discussion highlighted some common trends, but also the different contexts, to workforce planning on either side of the Channel.

The different environments for SWP

In France, employers have no choice but to plan their workforce. Yves Barou, the European Circle’s founder, and Jean-Christophe Sciberras explained that since 2005 under the ‘GEPP’ regulations in France, all employers with more than 150 employees are required to discuss workforce planning issues at least every three years with their staff representatives.

This collective bargaining legislation requires:

‘A plan that allows the company to anticipate the consequences of developments linked to its internal and external environments and its strategic choices… Its purpose is to determine the actions to be implemented in the short and medium- term to cope with changes in the workforce.’

Typical issues covered in these workforce plans include: ‘measures to reduce recruitment difficulties’ ; ‘improving career management’ and ‘optimising training plans to develop the skills of employees’ ; ‘dealing with an age pyramid problem’; and ‘resolving an overstaffing’ situation, for example resulting from the introduction of AI. Exactly the sorts of issues that IES engages on with our more forward-thinking employers voluntarily over here.

The paradox of the series of unexpected crises the HR function has had to deal with over the past four years, which rendered most business plans and budgets totally worthless, is that it has finally meant that far more UK employers are engaging in SWP. Almost half (46%) in fact in the CIPD’s latest (and renamed) Resourcing and Talent Planning research study.

Despite the very different legislative and social contexts in the UK and France, our meeting last Tuesday revealed at least three common trends in workforce planning.

Common trends in Anglo-French SWP:

1. Skills

Workforce plans are increasingly skills and skills development plans. Whether you are being forced to offer ‘golden hellos’ in trying to recruit chefs in London or Lyon; or struggling to recruit experienced AI employees to work for Mistral in France or Helsing in Germany, or struggling to get hold of and hang onto construction workers for the Olympics in Paris or Sizewell C nuclear power station in Suffolk; the lack of skilled employees is your biggest business constraint and HR headache right now.

In a damning report, Raising the Bar: Increasing employer investment in skills the Learning and Work Institute research shows that UK employers’ training spend slumped after the 2008 financial crash. But unlike in other European countries, it has never recovered. Today it is roughly half the spend per employee of the average French or German company. And UK firms wonder why they don’t have and can’t find staff with the skills they need?

2. Internal career development and talent management

The second trend is the shift from a focus on external market recruitment to source future labour needs, back to a stronger emphasis on internal staff development and ‘growing your own’.

Robert Peasnell, one of the UK members of the Circle, described the  findings from PeopleScout’s Skills Crisis Countdown study. This found that 9 in 10 HR leaders believe that up to 50% of their workforce will need new skills to perform their jobs in the next five years.

Yet half these leaders have no plans for workforce transformation and just 7% say they are pro-actively investing in reskilling programs. 25% of their employees say they have not been offered training opportunities in the past three years.

IES’s Progression in Employment research in the UK and five European countries illustrated the success of companies such as Scandia Hotels and Corbin and King in retaining and developing  their low-paid workers. Common actions to address their skill shortages and to progress employees internally included job re-design and career pathway mapping and conversations, stable working hours and pay progression.

The results indicated a real ‘win-win’ set of outcomes for employers and employees. The series of recent crises are encouraging more employers to follow their example.

3. Values and people as well as numbers and spreadsheets

Third has been the belated recognition in both the UK and France that workforce planning is as much to do with qualitative values and purpose as it is with quantitative numbers and stats. These are genuinely ‘people plans’.

IES’s research on strategic HR management strategies highlighted that ‘rather than driving out strategic planning, an increasingly rapidly-shifting external environment appears to be ‘driving in’ more multi-stakeholder business strategies and a strategic approach to people management.’

But our research also found the ‘strong influence of corporate values and culture on the components and delivery of the people management strategy’. You can’t plan how many people you need with which skills without addressing these key questions of what sort of values and culture do we want and need in our organisation in the future.

While the regulations In France ensure companies have to draft their workforce plans, it can’t compel them to agree these plans with their employees, nor to put them effectively into practice. So tailoring the content to each company and their workforce is key to their impact.

That the French requirement forms part of their regulations on social dialogue highlights that SWP can’t be carried out effectively by a few strategic and HR technical experts over their laptops and spreadsheets. These plans have to ‘live’ in the organisation, to come ‘out-of-the-closet’ as one of our French colleagues expressed it.

Workforce planning: coming in and ‘out-of-the-closet’

We found it is a genuinely people-focused approach, characterised by in-depth workforce planning, sustained training investment; and a genuinely employee-empowering, ‘living-our-values’ set of practices, to produce significant gains in employee engagement and performance’. IES Research Report Strategic HRM in Practice.

The UK government appears unlikely to pass the legislative requirement which the French implemented 20 years ago to try to ensure workforce planning occurs at the micro- level. But the unforeseen health and economic crises of the past four years do at last seem to be encouraging more UK employers voluntarily to follow the French lead.

We at IES have plenty of experience and examples, including the IES-authored CIPD Guide to Strategic Workforce Planning freely available to help you on your way. 

If you would like to discuss any issues around SWP our consultants are here to help, contact:

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Any views expressed are those of the author and not necessarily those of the Institute as a whole.