Why Strategic Workforce Planning Is More Valuable Than Ever

Unfortunately, few companies go beyond traditional operational workforce planning. They forecast the headcount budget for the next year to inform hiring and location planning.

That won’t cut it in today’s business environment. The rapid pace of digital and AI has many companies scrambling to form a vision of the future, but they need to ensure their people are ready, too. And while many are talking about upskilling, strategic workforce planning is also becoming increasingly necessary.

Good strategic workforce planning is different from operational planning because it looks much further ahead to determine what kind of workforce is needed to deliver the company’s long-term strategy. It’s characterized by four principles.

It is future-back, not today-forward.

The gravitational pull of today is strong. By not looking far enough out, leaders may rely too much on thinking that’s grounded in existing efforts and plans. Even looking three years out is insufficient to force leaders out of an incremental mindset.

Instead, the best leaders take a future-back approach—they envision the distant future and then build a plan to achieve it. They understand that good strategic workforce planning often enters an uncomfortable space where some aspects of the “how” are unknown.

It is uneven.

Successful strategic workforce planning is not one-size-fits-all. It often involves focusing differentially on a few job families—groupings of roles with reasonable skill overlaps. The best plans focus exclusively on large or scarce workforce populations that expect to see change.

It is learning-based.

No one can predict the future. By definition, a strategic workforce plan will be wrong. However, leaders can guard against incorrect assumptions by making the plan easily adaptable and updating it each year based on what they’ve learned. They will watch carefully for the right signposts and distinguish between offsetting forces. For instance, leaders might make assumptions around increasing headcount due to business growth and decreasing headcount from automation productivity gains.

It is simple enough to be repeatable.

A common pitfall in strategic workforce planning is overcomplicating the process. When leaders make the workforce plan too granular, it becomes a bureaucratic, wasted effort that the business resents. The best processes are tied to annual strategic planning. They feel like a light addition to thinking through the strategy’s people implications.

USAA recently reimagined its strategic workforce planning process around these four principles. As a mission-led financial services company run by members for members to serve the military and its families, USAA sees its employees as a critical asset.

“With evolving business needs and increased AI and technology adoption, USAA needed to adapt its strategic workforce planning approach,” says Tami Cabaniss, chief human resources officer at USAA. “We now have richer dialogues about how to build the future workforce we need and can better plan and upskill our people.”

As demonstrated at USAA, good strategic planning thoughtfully assesses both human and financial capital. HR teams can help the business define the future at the job family level in the same way that finance supports forecasting major P&L and capital lines. Ultimately, the business must decide how provocative it wants the numbers to be, but HR can help shape the discussion.

When done well, strategic workforce planning can ensure organizations are prepared to meet their long-term strategic goals. It can be a valuable and natural extension of the business strategy that yields a major competitive advantage, positioning a firm for sustained growth and innovation, no matter the changes to come.