This article was updated on July 10, 2018.
A skilled labor shortage is on the horizon, and businesses can see it coming. In fact, some analysts feel that the failure to train, mentor and promote employees — especially entry-level workers — has led to the skills gap many businesses face. Seventy-six percent of senior executives believe the market for skilled talent will grow tighter and 69 percent of all respondents think recruiting will become increasingly expensive, according to a report authored by the Economist Intelligence Unit (EIU) and supported by the ADP Research Institute® (ADP RI), Strategic Drift: How HR Plans for Change.
Deloitte reports that 89 percent of businesses see leadership needs as urgent, and 28 percent feel they have a weak leadership pipeline. For HR leaders with a workforce to build this raises a critical issue — namely, top talent can't always come from outside the organization.
Strategic Workforce Planning — A New Priority
According to ADP RI, the majority of HR leaders believe strategic workforce planning will be a top priority for their businesses. But it's still unclear who owns strategic workforce planning. More than half of leaders feel it's up to senior management, while 28 percent say it's an HR responsibility. Meanwhile, 37 percent of respondents feel the solution will come from investing in strategic workforce planning technology. While software is one part of the puzzle, true strategic workforce planning requires firm HR leadership and a top-down commitment from the organization.
Here are five ways HR leaders can fix the skilled labor shortage and raise up talent from within.
5 Ways to Maximize Strategic Workforce Planning
1. Prioritize Strategic Workforce Planning
Because there can often be confusion about who owns the mandate to implement workforce planning and what it means, you should work to establish shared priorities within your business. Clearly define your strategic workforce development goals, and then determine how it will be implemented and who will contribute resources to the effort. For example, training talent to take on senior technical roles will require a different plan than improving the retention of entry-level employees.
2. Diversify Training
Businesses are investing in training for technical skills to increase their competitive advantage; however, you shouldn't forget about the importance of soft skills like leadership and communication. Businesses that want to improve employee performance and growth should invest in training for a complete range of skills.
3. Invest in Benefits
While controlling costs has been a major trend for corporations looking at overall compensation and benefits, the pendulum may be swinging in the other direction. Businesses that want to attract — and retain — top talent are evaluating their compensation, benefits and work arrangements to stay competitive. It may cost less in the long run to give more generous raises, better health insurance or allow employees to work from home one day a week than extensive recruiting initiatives.
4. Develop Career Paths
To improve retention and talent acquisition, you should make career paths that are obvious and possible. Employees will often leave an organization if there's no opportunity for growth. Spend time developing clear paths of progression for talent. Make advancement part of the review process, and always provide understanding of where a team member is in their professional development.
5. Cross-Train Employees
You should also look to allocate professional development budgets for your workforce, which can keep them engaged and grow their skills to improve performance. There are numerous strategies, from supporting advanced education to setting aside funds for conferences to create cross-training opportunities.
For example, cross-training could involve giving a finance employee the opportunity to contribute to a marketing project, or an engineering employee time with a creative team. This kind of collaboration can foster stronger team ties, a deeper understanding of the business, new ideas and well-rounded learning opportunities.
For HR leaders today, creating plans for strategic workforce planning is a top priority. Retaining top talent — and creating environments where they thrive — will likely depend on it.