Adecco Canada - Workforce Planning

The Economy’s Impact on Workforce Planning Efforts

Workforce planning has been a key strategy within organizations for the last decade, a primary concern being the anticipated reduction in Canada’s labour force due to a mass exodus of Baby Boomers. Canada may begin to feel the impact of this phenomenon as early as 2010.

While organizations are trying to plan long term for this labour shortage, unemployment has become a current reality. The economic crisis has led to increased job losses as companies are trying to manage their overhead expenses in light of reduced sales. The resulting increase in unemployment may have a short-term impact on your workforce planning strategies.

Managing long-term planning needs throughout short-term fluctuations is a delicate balance. Your short-term strategy may in fact be focused more on rightsizing efforts and cost containment than it is on the strategic plan for the future. This is understandable. An important point to keep in mind, however, is that your primary goal throughout this period should continue to be to retain your highest performers, who will positively impact results in both slow and prosperous times.

This short-term response may be complicated by the changing desires of your employee base. Specifically, individuals who were planning to retire in the next year or two may be holding off due to decreased retirement portfolios – thus causing a challenge for you with individuals who were perhaps hired with expectations for opportunities within that timeframe. In addition, with fewer available positions within the market place, you may have less voluntary turnover than you are used to. This is both positive and negative. On the one hand, you eliminate the high costs associated with voluntary turnover; however if you need to release employees, you end up with increased involuntary costs. In addition, your business may thrive on a certain level of turnover, to make way for advancement and opportunity for employees in the junior ranks. Whatever the situation may be, you must be sure to stay on top of your planning efforts in order to deal with immediate issues.

Despite short-term contingencies, organizations and governments alike must continue to be proactive in their long-term strategies, in order to ensure we are preparing for the impending labour force decline. Below are some suggestions on how you can effectively balance your short-term needs with your long-term strategy:

Ensure that you maintain open, honest and constant communication with employees so that they are aware of what your vision and goals for them are, and in order to help you better understand what their long- and short-term employment goals are. Tie these discussions to broader conversations about their performance.
Implement a talent management program to help develop and retain high-potential employees. Continue to invest in and develop your top performers even in tough economic times.
Look at cross-training initiatives to mitigate exposure if there is a loss of key talent.
Continue to promote your employment brand in order to maintain visibility within the labour market during the economic downturn.
Proactively recruit throughout both good and less prosperous times to ensure you always have a pool of qualified and interested candidates. Be honest about the likelihood of employment opportunities and the timeframe for them.
Utilize a contingent workforce for ultimate flexibility. This is useful in all economic climates, as it minimizes your risks and increases your ability to respond to unpredicted labour needs.
Remain informed and educated on both economic and company forecasts so that you can plan for current and future requirements.
Continue to measure your results. Turnover statistics may not be positive, but by setting and measuring goals related to the retention of high performers, you will be better able to understand and predict your company’s needs.