Future-proofing your workforce

As New Zealand faces a rapidly changing landscape, the imperative to equip our workforce with the right skills has never been more urgent. With technological advancements, evolving consumer demands, and shifting demographics, organisations across the country are actively seeking solutions to ensure their workforce is future-fit and capable of achieving both short-term and long-term strategic objectives.

Workforce reskilling and upskilling

In today’s rapidly evolving market, upskilling and reskilling employees has become essential for business success. According to the World Economic Forum's Future of Jobs Report, approximately 60% of the workforce will need reskilling by 2027. Moreover, the average lifespan of skills continues to shrink and is now less than 2.5 years. As a result, organisations face the challenge of needing to constantly upskill and reskill their workforce. New Zealand is no exception to this. 75% of employers report a skills shortage, believing their teams lack the capabilities needed to fulfil their strategic objectives. Evidently, we must reskill and upskill the workforce at a pace many organisations are not familiar with. So, how can organisations do so? The answer lies in strategic workforce planning.

The role of strategic workforce planning

Strategic workforce planning is the process of aligning an organisation’s talent needs with its long-term goals, ensuring the organisation has the right people with the right skills to drive organisational value. When executed effectively, strategic workforce planning offers organisations a series of benefits, including equipping them with the insights necessary to:

• Identify and source future skills: organisations can pinpoint the skills their workforce will need to remain competitive based on market trends, the competitive landscape, and the organisation’s strategic vision. For example, organisations will need to consider factors such as automation and the increased use of AI and the impact this will have on their workforce.
• Assess workforce capability: organisations can also use strategic workforce planning to assess their current skills landscape against their desired future skills to identify existing skill gaps. This allows organisations to tailor their learning & development programmes to focus on upskilling critical skills gaps.
• Develop a workforce strategy: strategic workforce planning also enables organisations to build a long-term workforce strategy, focused on building, buying, and borrowing the skills an organisation needs to remain competitive and developing targeted strategies to ensure the right people with the right skills are positioned to drive organisational value.

Despite the necessity of strategic workforce planning, only 42% of organisations in New Zealand engage in strategic workforce planning regularly. This offers organisations that do engage in strategic workforce planning with a significant advantage over those that do not.

The strategic workforce planning process

The strategic workforce planning process is centred around three key steps; identify, build, and embed. Many organisations will often complete the identify and build steps of the strategic workforce planning process. However, to fully realise the benefits of strategic workforce planning, an organisation must embed it within BAU operations so that it is integrated across the business and performed regularly.

1. Identify: the first step of strategic workforce planning involves assessing internal and external factors to pinpoint workforce skills required for future success. Organisations should start with their long-term strategy to understand the direction of the organisation, and the supporting skillsets it will need. Organisations will also want to assess their external environment, identifying trends and disruptions across the market to understand future challenges and opportunities. This step should be driven by HR with input from business leaders and other key stakeholders across the organisation.
2. Build: once future skill requirements are understood, organisations must then start to build these skills across the workforce. The "Build, Buy, Borrow, Bridge" approach offers organisations several different strategies to develop the necessary skill sets.

• Build focuses on cultivating skills internally through tailored training programmes and learning pathways. This approach is essential for developing skills that differentiate the organisation from its competitors. Often, this strategy is used for human capabilities such as leadership and customer service. An effective build strategy is critical to developing a future-fit workforce as 70% of learning occurs on the job.
• Buy involves acquiring external resources or capabilities through mergers, acquisitions, partnerships, or purchases, rather than developing them from scratch. It includes purchasing companies, licensing technology, or acquiring equipment and infrastructure, ultimately allowing for quick access to talent without extensive internal training.
• Borrow enables temporary access to external resources through partnerships, alliances, outsourcing, or subcontracting. It allows organisations to utilise expertise, skills, or resources without long-term commitments or full ownership.
• Bridge provides temporary solutions to address immediate gaps or needs while a permanent solution is being developed. It ensures continuity and avoids disruption by employing temporary workers, outsourcing tasks, or utilising interim technology or systems. 

A combination of these strategies will enable organisations to effectively build a future-fit workforce. Choosing which strategy to implement will depend on a range of circumstances. For example, the “Build” approach is suitable for long-term needs; “Buy” is ideal for urgent requirements; “Borrow” and “Bridge” are effective for temporary projects or specialised skills.

3. Embed: as highlighted above, the key to maximising the value of strategic workforce planning is integrating it across various organisational processes. Often, this is where organisations fall short, conducting only steps one and two above. However, to be truly effective, strategic workforce planning must be embedded into many enterprise processes.

• Recruitment: strategic workforce planning should underpin an organisation’s recruitment strategy to ensure efforts are focused on sourcing candidates with the capabilities an organisation needs today and into the future.
• Learning & development: learning and development programmes must be designed to address the future skill requirements identified in the strategic workforce planning process to ensure training and upskilling opportunities are targeted and effective.
• Performance management: performance management systems should incorporate future skill requirements as a key metric for evaluating employee performance and growth.
• Succession planning: strategic workforce planning should be used to inform succession planning decisions, identifying successors based on their capabilities and skills required for tomorrow's challenges.