Posted: 31 Jul. 2023 9.6 min. read

Organizational design and workforce planning

Core capabilities to become a quantified organization¹

Authored by Dhruv Patel, Jesse Jacks, and Hilah Loewenstein.

When things don’t go to plan…

Have you ever considered why none of your plans actually go according to plan? You designed your organization—planned what you wanted your workforce to look like. And yet, when put into practice, somewhere along the way, your workforce isn’t falling into place the way you wanted it to, and you may not even be on target to achieve your strategic goals for this year or the future.

Organizations need nuanced and integrated workforce solutions to target the increasingly complex challenges posed by today’s uniquely dynamic talent market—or they risk falling behind. Businesses need new ways to prepare for the future. They also need to proactively address resource requirements in a highly competitive talent market. However, this climate provides a great opportunity to think about workforce solutions in a more holistic way to achieve more significant outcomes. By taking an approach that combines organizational design (OD) and workforce planning (WFP) activities, organizations can strategically improve efficiency and enhance data-driven decision-making.

Two processes are better than one

Organizational design and workforce planning are two sides of the same talent coin—designing and managing your workforce within an organization. Organizational design is the discipline of making intentional choices to align strategy to the operating model and organizational structure. Workforce planning involves anticipating needs, comparing the current workforce, and identifying gaps that need to be filled for the future. Often these concepts are seen as disparate and unrelated engagements and initiatives done in isolation. Doing these two independently increases the risk of missing out on key benefits. When these are siloed from one another, the results are discrepancies between the plan and the actual organization it is supposed to plan for.

On the other hand, combining organizational design and workforce planning—especially when enabled by platforms such as Orgvue—allows organizations’ teams to not only work more efficiently across the enterprise and avoid siloes but also boost margins, eliminate redundancies, and deliver more well-rounded and logically structured work.

Furthermore, delivering the two in tandem allows for more transparency into additional downstream considerations, such as talent ecosystem adjustments, future of work, skills-based organization, and transformation intelligence.

For instance, if organizational design and workforce planning are done separately, it can be hard to assess what gaps you’ll have between your current and planned talent needs for the future. If done together, you have a clear line of sight between who you have now and what your future demands will be. Rather than trying to backfill gaps as they spring up, you can start making talent ecosystem adjustments to challenge the status quo and see what sort of alternative work sources may be a better fit. There may be opportunities beyond your full-time equivalents—in consultants or gig economy workers.

Enabling skills to shine

Using organizational design and workforce planning in tandem also allows for a skills-based organization. When you look at what’s happening in the current market concerning economic downturns and layoffs, business leaders really need to start thinking about organizational agility and efficiency. What are the skills required for the work? Combining organizational design and workforce planning allows you to think not just about your organization’s headcount, but strategically about the skills workers possess—along with new skills needed to achieve organizational imperatives: how to access them, where they sit, and when you might need or get them in the future.

Let’s look at some of the wide range of client uses cases where an integrated organizational design and workforce planning approach is beneficial:

  • Example 1. Integration: An organization is looking to integrate an entity to expand its geographies. Bringing organizational design and workforce planning together will allow the team to look at the organizational structure holistically and see what people/skills overlap between the two organizations and where they might be able to strategically optimize for the future while retaining the talent they need now. This approach highlights shared efficiencies across the two organizations to help inform reorganization. Furthermore, the new organization will be able to perform impact analysis based on workforce demand and supply models against the new organizational design. This effort will enable access to new capabilities and technology, allow them to expand their geographical footprint, and create synergies and cost savings, especially in management roles.
  • Example 2. Reorganization: A revenue-generating business unit is looking to reorganize subsegments to achieve cost efficiencies and drive strategic growth. A well-designed organizational design/workforce planning mechanism will let them reorganize while not forgetting they still must support their current workforce. This combined approach will also yield recommendations on hierarchical reporting, job architecture, and a tactical implementation plan. These will create improved cost efficiencies, accelerated business growth, and increased market reach and productivity.
  • Example 3. Workforce activation: An organization is looking to create an agile organizational structure that can adapt to changing financial circumstances. Combining organizational design and workforce planning will allow them to work together to see the changes quickly and accurately—while ensuring they have the necessary pieces in place to protect their workforce through those changes. With a combined approach, the organization will gain greater flexibility in workforce management, an agile workforce that responds quickly to the changing market conditions, a flexible organizational structure that can be strategically altered based on the ongoing market conditions, and a cost impact analysis based on models of workforce demand and supply against the new organizational design. They would have improved agility, cost savings, and improved competitiveness in the marketplace.

Bringing it all together

So how does one actually put the two together? Because organizational design and workforce planning is often done sequentially, it may seem challenging to do them together. But it makes sense to have the same people doing/thinking about both capabilities so you have a cohesive way to deal with changes quickly and easily while ensuring your daily workforce is being considered. Implementing the two together allows you to make those big (or small!) changes without losing sight of the people involved in the change—those currently in your organization and those you may need in the future. By situating both organizational design and workforce planning in a center of excellence (COE) and ensuring external stakeholders remain the same throughout the processes, you will allow a continued flow of thoughts and ideas and ensure smooth sailing the whole way through—no matter what comes to rock the boat.

Finally, technology enablers can help facilitate a combined approach. For example, Orgvue can tackle these use cases due to its organizational design and workforce planning capabilities and its high degree of customizability. Businesses should maintain clean, updated human resources information system (HRIS) data to allow for detailed design and workforce planning within their technology enabler of choice. This technology will allow for automation of information between the two different functionalities, leading to easy combination and view of both functions in conjunction with one another.

By thinking of these activities in silo, there is likely a loss of translation between each key activity and a higher likelihood of transformation inefficiency. By enabling centralized COEs, involving similar stakeholders (and resources) between both set of activities, and using technology enablers that seamlessly allow moving from one capability to the other (for example, Orgvue), companies can better improve their likelihood of successful transformations and then running of their newer, more efficient, and agile business.





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