Manufacturers & Distributors ARTICLE -
Face the Future - Strategic Planning Can Hone Your Workforce

Target Audience: Manufacturers and Distributors, M&D Companies, Manufacturing Companies, Distribution Companies

As manufacturers fight to stay competitive, an aging workforce coupled with an increasingly global marketplace makes skilled employees more important than ever. The question that may keep you awake at night is how to find enough qualified workers to replace your skilled, experienced employees who are on the brink of retirement.

For an increasing number of manufacturers, the answer begins with strategic workforce planning, which helps address a more basic question: What constitutes “enough”?

Target skills, not people

Strategic workforce planning involves analyzing your company to determine the skills and talents required to execute your business strategy and then making sure you have the right people in the right place at an acceptable cost.

Done right, the process can help you control labor costs, make informed business decisions in areas such as where to locate new plants, and evaluate whether to do jobs in-house or outsource. This isn’t something you can complete quickly. In fact, you’ll never fully complete it because influences such as changes in the market, the economy or the labor pool will force ongoing reassessment. But it can be extremely valuable.

Every company’s approach to strategic workforce planning will differ, but there are several options available:

• Traditional analysis of labor supply and demand,
• Workforce analytics, or mining current and historical employee data to identify key relationships,
• Human capital planning, which segments jobs by their importance to the business strategy, focusing on broad trends over a period of years, and
• Forecasting and scenario modeling, in which you create forecasts with multiple “what if” scenarios.

You may elect to use parts of each approach or develop another path more suitable for your company, but don’t expect to rely on numbers and spreadsheets to plan your workforce. Demographics, emerging technology and a business landscape rife with mergers and acquisitions will all play important roles in your planning; statistics and science aren’t enough.

Talk, talk, talk

Strategic workforce planning requires conversation and an emphasis on quality rather than quantity. You’ll need communication throughout the company to gather relevant data, identify critical skills and develop strategies to obtain them.

Top management, employees and other key stakeholders (such as suppliers and customers) from across all business lines are important contributors. You’ll need input from all of them to determine the skills required to achieve the results you want and to develop strategies to close gaps in the number and alignment of personnel.

Flexibility also is important. One payoff from strategic workforce planning is that everyone in the company knows which jobs and skills you’ll be seeking down the road. That means you can target the training you offer.

It also means employees can target the jobs they want and acquire the skills they need to get them. In effect, you’re creating an internal employment bureau that not only will help maintain the proper proportion of crucial skills, but also will help your workers self-select the jobs for which they’re best suited.

Finally, you’ll need to determine how to measure success. Consider how well your workforce strategies are implemented and then evaluate their effects. Then build on your successes as you start the cycle again to adapt to changes in labor, materials, globalization, technology and all the other factors that affect the manufacturing industry.

Get some sleep

You may never get strategic workforce planning exactly right across all levels of your company. But you’ll probably manage your human capital more efficiently and make sounder business decisions because of the insights and nuances the process brings to light. And that may help you sleep.

Find out how our accountants and consultants can add value to your business. Email us or call us at 1 (888) 875-9770.

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