“The global digital transformation market is expected to reach $2.1 trillion by 2030 at a CAGR of 23.72%.”- Straits Research
The rapid proliferation of digital transformation across numerous industries has created a huge global demand for advanced IT skills. Unfortunately, the IT industry is continuously grappling with challenges like labor shortages, skill gaps, supply chain disruptions, cybersecurity threats, cost pressure, etc.
To overcome these bottlenecks, IT companies must possess an optimized talent pool. This is where robust workforce planning can help these firms meet the rapidly changing demands and ensure business sustainability.
Furthermore, it will enable IT firms to reduce resourcing costs, maximize workforce productivity and improve overall profitability.
This article elaborates on the significance of workforce planning in the IT industry.
But before that, let’s elucidate some critical elements affecting this sector’s workforce planning.
Factors influencing workforce planning in the IT industry
IT workforce planning involves analyzing the availability of talent, forecasting, and planning future demand for IT services, and developing strategies to attract, build and retain the necessary workforce. This ensures they have the right resources who can deliver quality services.
However, there are several factors that an IT firm must consider before designing a robust workforce plan. They are:
- Technological advancements
Due to the emergence of advanced technologies like Data Science, Cloud Computing, ML, etc., existing technologies and certain IT skills can become outdated at a faster pace. Therefore, with efficient workforce planning, IT firms can identify emerging technologies relevant to the business and implement the necessary training to improve the technical proficiency of their consultants and avoid skill obsolescence.
- Industrial trends (remote/hybrid model)
IT firms must consider current industry trends and adapt their workforce plan accordingly. For instance, in recent years, remote and hybrid work models have gained prominence amongst IT professionals. Therefore, IT firms must consider the technology infrastructure needed to support their employees. This way, companies can attract and retain top talent in a highly competitive job market.
- Long-term and short-term business goals
Workforce planning must align with the organization’s overall business strategy. Therefore, while formulating a workforce plan, IT business leaders must assess the operational and strategic goals of the organization and identify short-term and long-term resource demands. In addition, the workforce plan must be flexible enough to adapt to changing business needs while ensuring that the organization has the right talent to succeed.
- Skill levels of the existing workforce
When developing a workforce plan, IT managers must assess the current skill levels and capabilities of the existing workforce to identify any gaps or talent shortages that need to be filled. With these accurate insights into the existing workforce’s skill levels, an organization can ensure it has the right talent to achieve its business objectives.
Considering these factors, let’s see how workforce planning can be advantageous for IT organizations.
Benefits of workforce planning in IT companies
Besides addressing challenges like skill shortages, and frequent hiring/firing cycles, workforce planning provides several other potential benefits to IT organizations.
Here are a few:
Reduces resourcing costs of IT professionals significantly
“According to statistics, the median salary of an IT professional in the USA is $97,430.”
Due to fierce competition for a limited pool of skilled professionals, the IT industry is battling with high resourcing costs. A solid workforce planning process can help IT organizations evaluate labor charges and identify cost-effective global resources. Workforce planning helps determine whether skill requirements are one-time or recurring and build the right mix of contingent and permanent consultants.
In addition, it allows IT firms to maintain the right band mix of consultants for every project to control costs. For instance, the IT manager requires six support engineers to optimize the application performance in an app maintenance project. By assigning a mix of senior and junior support engineers’ firms can minimize project resourcing costs.
Helps bridge capacity vs. demand gap of IT workforce
Workforce planning helps IT managers forecast their future workforce requirements by considering the company’s growth plans, pipeline projects, and other business objectives. This way, they can identify demand vs. supply gaps and implement suitable course-corrective measures to eliminate last-minute hiring or firefighting for resources.
For instance, a pipeline software development project requires five Python developers. However, only three developers were available to work on the project. Here, managers can out-rotate 2 Python developers from projects that have reached the completion stage or initiate planned hiring. This way, they can bridge the demand gaps and prevent project delays.
Maintains workforce competency in real-time
Most IT firms capture consultants’ skills and competencies during onboarding but fail to update them regularly. However, managers need up-to-date resource information to ensure the availability of competent IT professionals for projects.
A real-time skill inventory can help IT businesses gain a holistic view of the workforce pool and their competencies.
Consequently, it helps them match consultants’ skills with the right projects. For example, a web development project requires a UI/UX designer with expertise in Figma. With the help of the competency matrix, managers can narrow the search and assign the most suitable UI/UX designer to the project, thereby ensuring successful delivery.
Control the unplanned attrition within the projects
“A survey indicated a significant increase in IT job attrition, with approximately 25.2% of employees quitting their jobs.”
Factors such as lack of career development opportunities, burnout, etc., contribute to high attrition rates in the IT industry. A robust workforce planning enables IT firms to reduce unplanned attrition in different ways. It ensures that IT resources work on multifaceted projects that align with their skill set and interests.
Furthermore, with workforce planning, managers can create effective L&D methods like formal training, mentoring, feedback, peer-to-peer coaching, etc., and aid in their professional growth and development. This will result in better job satisfaction, lower burnout/disengagement, and prevent unplanned attrition.
Manages the bench size of IT employees effectively
IT projects experience frequent ramp-up and ramp-down phases during the project lifecycle. In the absence of visibility into ramp-down activities, consultants spend extended periods on the bench, resulting in billable losses. Workforce planning enables IT managers to forward plan, and assign resources to suitable opportunities before they hit the bench.
For instance, a software development project had to roll off several software developers post the execution phase. With workforce planning, managers can anticipate which consultants will be released from the project and assign them to suitable work accordingly. In addition, they can initiate training/upskilling, provide shadowing opportunities, or sell the excess capacity and effectively manage the IT bench size.
Future-proof skills of IT personnel for emerging technologies
“According to a survey, 91% of technology managers said finding skilled IT professionals is challenging.”
IT firms must continuously upgrade the tech proficiencies of their workforce to keep up with rapidly changing technological advancements and prevent skill gaps. Here, workforce planning can help IT managers facilitate appropriate training programs that can be customized to the Individual Development Plan (IDP).
For instance, consider an IT firm with a team of developers proficient in Java and Python. While these developers can build, deploy, and manage applications, they may need to be upskilled to undertake advanced projects. Therefore, the IT firm’s managers can upskill them with in-demand skills like SQL. This will help diversify consultants’ skill sets and enable them to stay relevant in the volatile market.
Facilitate succession planning for critical resources
“While 86% of leaders believe succession planning for leadership roles is a priority, only 14% believe they do it well” – Deloitte.
Succession planning is a crucial process in the IT industry, especially for critical resources such as top-level executives, technical experts, and key personnel with specialized knowledge and experience. Workforce planning can facilitate succession planning by identifying potential successors and creating a roadmap for their development.
For instance, let’s say an IT company has a CTO who has built strong relationships with clients and possesses extensive technical knowledge and expertise but will be retiring in a few years. To fill this critical position, managers can use workforce planning to identify potential successors and create a development plan, which includes mentoring, training, and coaching to help them develop the skills and knowledge required to take on the CTO role in the future. This facilitates the seamless transfer of tacit and institutional expertise and ensures business continuation.
Having enlisted the benefits, here is how modern workforce planning can help IT firms.
How can modern workforce planning help IT firms?
Workforce planning is critical for organizations to enhance business efficiency and achieve short- and long-term goals. Implementing advanced workforce planning software helps IT firms to increase the effectiveness of the entire process further. Here’s how:
The 360-degree visibility of the tool enables managers to filter the IT professionals based on their skills, competencies, location, cost, availability, etc. For instance, if an IT project requires a Data Analyst, they can use the filters like job role, location, competency, etc., and identify resources from Mexico and India and select the best-fit employee.
In addition, forecasting capabilities help managers foresee pipeline projects and evaluate the demand. With the capacity vs. demand reports, the managers can identify the shortage/excess of resources in advance and implement resourcing measures to bridge the same.
Moreover, with a real-time competency matrix, businesses can gain up-to-date information on the consultants’ skills. It helps facilitate succession planning by identifying skilled IT personnel and preparing them for future roles.
The project vacancy and bench reports help managers identify vacant positions and fill them with suitable IT consultants. Further, the open-seat feature empowers IT employees to choose projects and tasks based on their interests, thereby enhancing productivity and engagement. Moreover, this kind of incentive will highly motivate the consultants and reduce attrition rates.
Lastly, the what-if-analysis helps IT organizations to create and compare various scenarios in a sandbox environment. Then, based on the insights, managers can formulate a suitable workforce plan. Hence, it will help future-proof the workforce.
By leveraging these capabilities, IT firms can optimize their workforce and ensure that they have the talent required to meet the demands of the industry.
Bottomline
“Acquiring the right talent is key to the growth of an organization”– Marc Bennioff, Salesforce CEO.
An efficient workforce planning process can help the IT industry make the right staffing decisions aligned with its mission, strategic vision, and budget. Therefore, leveraging a robust and advanced workforce planning tool can help IT firms overcome resourcing challenges like increasing costs, unplanned attrition, skill gaps, etc. It will also give your company a competitive edge and enables you to achieve organizational goals successfully.
