The labor market is significantly influenced by digitization and demographic change.
Because of digitization, more social and technological skills are required, and the rapid change will lead to an enormous shortage of qualified workers.
This is reinforced by the aging society in Germany.
The declining number of people of working age will put additional pressure on the labor market.
How can companies face this challenging situation, in which the unrestricted availability of potential employees is no longer a matter of course?
Strategic personnel planning is an important tool for securing corporate strategy and growth.
Used correctly, it ensures that a company always has the right number of employees with the right qualifications.
If we reflect on the basics of business administration, strategic personnel planning goes through a four-stage control loop.
It consists of headcount planning (determination of the current status), personnel requirements planning (determination of the target status), analysis of deviations between target and actual status, and the initiation of measures that are listed under development,
A study at the Center for Performance Management & Controlling of the Frankfurt School of Finance and Management confirms the positive effect of strategic personnel planning.
The study results show that companies that have good strategic workforce planning in place make more accurate forecasts of capacity and skill gaps.
In addition, these companies are much better able to assess the effectiveness of talent management measures to close the gaps.
This makes it possible to develop, recruit or release employees in a timely and appropriate manner.
Which criteria make strategic personnel planning successful?
The results of the study result in clear recommendations for action in practice.
First, it shows that companies whose top management supports strategic personnel planning extensively are much more successful with their planning.
40 percent of the companies that took part in the study had strong to very strong top management support.
This means that top managers actively support strategic human resources planning, as it provides important aspects that define management's explicit objectives in corporate strategy.
The study results show that strategic workforce planning must be anchored at the highest corporate level in order to underline its transformative character.
Success factor key figures
Secondly, the comprehensive use of a holistic skill management system, a database in which the existing skills of the employees can be entered in a similar way to the LinkedIn career platform, is another success driver.
The skills are then compared with the requirements of the respective position.
In this way, skill gaps can be identified and closed through development measures.
In the sample of the study, 62 percent of the companies were using a strong to very strong skill management system.
It is important that HR managers as well as managers and employees are familiar with the system.
Thirdly, in addition to support from top management and the use of a skill management system, the integration of strategic personnel planning into existing controlling systems is decisive for success.
The study showed that it is crucial for success if companies define and track key figures for their strategic personnel planning such as capacity and skill gaps as well as personnel costs for each area.
The depiction of the strategic personnel planning in an integrated management system turned out to be a good possibility for the procedural design, so that no interfaces have to be overcome.
Strategic workforce planning can help companies to make any capacity and skill gaps transparent at an early stage, leaving enough time to react.
In some cases it is even possible to use the transparency and the time savings to optimally prepare existing employees for new tasks and not to have to access the job market.
The study makes it clear that the three essential success drivers – top management support, skill management system and controlling – must be taken to heart so that strategic personnel planning can have the desired effect.
Nils Gimpl is a research associate and Ronald Gleich is research director at the Center for Performance Management & Controlling at the Frankfurt School of Finance & Management.