4 min read

Why scenario planning is essential to effective workforce planning

Rupert Bader

Senior Director, Workforce Planning

Rigid organizations and leaders set in traditional ways have been unable to adapt and operate differently. They continue to struggle coming out of the pandemic.

Rigid organizations and leaders set in traditional ways have been unable to adapt and operate differently. They continue to struggle coming out of the pandemic. This affirms a universal truth: Preparing for different situations enables an organization to quickly change course when faced with the unexpected – not only to survive but to thrive! Businesses that developed a broad and deep view of their workforce were able to pivot quickly and leverage their people in effective ways ahead of competitors and market changes. 

Scenario planning and forecasting are essential tools to quantitatively assess the possible impact of various situations on the cost, capability, and capacity of the workforce – whether the changes are from pandemics, financial crises, economic instability, or social unrest.  You need to connect financial forecasts to headcount, expenses, and product roadmaps for smooth transitions in times of unpredictable upheaval. Agility and connection help teams across HR, including talent acquisition, total rewards, and learning and development teams understand demand and to shift strategies accordingly.

“We’ve been scenario planning since we became Anaplan customers two years ago. One of the first things we did was build a strategic workforce planning model allowing us to forecast potential scenarios with some standard parameters, as well as custom scenarios. Business leaders have become a lot nimbler in their approach, as they’re able to toggle between scenarios to inform their decision-making. Some users even started using the scenario planning function in Anaplan as the base for a brainstorm, playing with headcount, attrition, or succession numbers to see how they affect the outcomes.” SVP People Analytics, global investment management

Scenario planning helps organizations be more agile 

Connecting the strategic objectives of the organization with tactical operational options enables leaders and managers to make more informed decisions, knowing they’re in full alignment with strategic objectives. To really drive agility, scenarios need to stay live and be continuously updated as new data comes in from core systems and broader market analysis. 

Where possible, scenarios should always combine external market information with internal operations and workforce data. Take, for example, an organization wanting to forecast its real estate requirements based on where customers, employees, and candidates are based around the world, their preferences for location, and how those preferences might shift over time. Scenario planning can offer huge insight into the need for office space over a given period of time, allowing that company to confidently make better and more cost-effective decisions. 

At Anaplan, we worked with Queensland Rail, which employs a diverse range of roles, including engineering, and trade. Anaplan enabled their strategic workforce planning process, which helped them drive their recruiting, skills development, and training, and guided career paths to close workforce gaps and ensure successful delivery of projects and services. 

How organizations are rearchitecting traditional work to transition to the new world of work

Organizations are getting creative about how they “earn” the commute of a person into the office, whether it’s a learning experience, a connection point with peers, leadership, partners, or customers, or free lunch. Some companies are encouraging opportunities to get together as well as offering periods of reflection and quiet work. This kind of flexibility creates more autonomy and empowerment for people in the way they operate. 
The enhanced focus on the purpose of work and its alignment to the goals of the organization mean more businesses are taking advantage of technology to automate routine tasks and processes. Employees are being encouraged to learn new skills and then take what they’ve learned to move their careers and the organization forward. 

“Atlassian, an Australian technology company, has a very broad view on flexibility. It has just introduced and trialed a four-day work week as well several other flexible initiatives, such as requiring employees to be in the office only four times a year.” Director of Workforce Transformation, global consulting firm 

At Anaplan, we already had a strong operational workforce planning process where the finance function had used our projections for attrition and set some goals around openings by quarter. We used PlanIQ to project what the attrition was going to be, and to increase the number of openings we had. So now, we’re hiring ahead of attrition. 

Conclusion 

Scenario planning isn’t just a nice-to-have anymore. It’s absolutely critical for HR and workforce planning professionals to have a line of sight into potential snags and opportunities with headcount, skills, office space, and more. Without scenario planning, businesses can be left in the lurch when disruption changes the status quo of work, as it did in 2020. 

How does scenario planning help the re-architecting of work?

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