By Dr. Gary L. Deel, Ph.D., J.D.
Faculty Member, Wallace E. Boston School of Business
One question that business owners must continually ask is how their workforce should be planned and structured to meet the needs of the future. In the 21st century, this question is of paramount concern as the workplace is, in many ways, more volatile than ever.
Businesses need to consider several questions related to their workforce design. Asking insightful questions will ensure that what business owners seek in the future is what they will need to support their business goals and gain competitive advantages in the marketplace.
There are several variables and dynamics characteristic to any workforce. They can typically be defined as number, nature, and knowledge, skills, and abilities (KSAs).
One obvious variable to starting up a business is the number of employees that will be needed. The answer to this question will depend on several factors, including:
1. The state of market conditions, such as supply and demand. For instance, how many people want a business’s products or services today, and how many will want them tomorrow? Assuming demand is stable or growing, can supply chains support a business’s sustained efforts?
For example, electric car company Tesla Motors experienced supply chain shortages in 2021 as a result of the COVID-19 pandemic and other factors. So even though intense demand for Tesla vehicles would have prompted hiring more workers to support their operations, they have been perpetually behind on production timelines due to not having the materials they need to build cars.
2. Anticipated expansion and projections for job automation that would either augment human productivity or replace it altogether. For example, in the wake of the COVID-19 pandemic that spurred labor shortages and public health protocols that limited human-to-human contact wherever practical, industries such as restaurants moved to robotic options for production in order to keep doors open and meet customer demand.
So even though these businesses may be sustaining themselves or even growing (everyone has to eat, after all), they may be doing so with fewer and fewer employees.
Another key component to workforce design is the nature of employees who will be needed. Do we require businesspeople or engineers? Office workers or scientists? Doctors or professors? Lawyers or security guards? The specific occupations to be performed will dictate the kinds of characteristics that the organization will want to look for in their workforce to fulfill their needs.
Some questions related to position types will be dependent on the scalability of the business itself. In other words, how linear is scaling as the business grows from small to medium to large? Most small businesses don’t have a need for or the budget to support a dedicated accountant, general counsel, or chief technology officer.
But as businesses grow, the amount of infrastructure needed to support large-scale operations grows too. Sometimes the growth is linear with the growth of operations, and sometimes it’s not.
For example, every growing business must decide at what volume threshold the trigger point resides for hiring a new worker. But hiring traditionally “corporate” staff such as accountants, lawyers and executives is determined by the point at which pressures on other management become unsustainable. Ultimately, these decisions are a matter of discretion for each organization.
Another question related to worker type is outsourcing. In some industries and some capacities, it may be cheaper or better (or both) to outsource certain functions to third-party partners. These moves generally reduce numbers and change compositions within the organization.
For instance, some hotels may choose to outsource certain functions including valet, bell services, housekeeping and even security. Naturally, outsourcing of any type comes with advantages and disadvantages. But the core change to an outsourcing strategy is to eliminate certain workforce needs for the business.
Related link: How to Start a Business While You’re Attending College
Knowledge, Skills and Abilities of the Workforce
The next question for business owners to consider is what types of knowledge, skills, and/or abilities (KSAs) will be needed by their workforce to perform their roles within the organization. Some questions to be considered are:
1. Does an employee need a certain level or kind of college degree to perform the job or be perceived as credible while performing it? Is it necessary to verify the conferral of these degrees or can a business owner simply assume the veracity of the information on a resume?
2. Does an employee need any kind of licensure or certification to do a job legally or legitimately within current regulations? What kinds of agencies or governing authorities should be considered or collaborated with for these kinds of efforts?
3. Should employees prove their ability to complete certain specific tasks or duties to be productive or functional? If so, how could they be tested? Here, business owners must think about a multitude of considerations, including efficacy and fairness. Business owners will need to make sure their tests actually measure the skills or abilities that they seek in their hires, and they will also need to ensure that tests don’t discriminate (even inadvertently) in such a way so as to provoke legal and/or ethical concerns.
4. How much experience is enough for employees? Ideally, business owners want to make sure that their stated standards are sufficient to ensure that applicants can do the jobs for which they are hired. But a threshold should not be so unreasonably high that it screens out otherwise qualified and valuable candidates, so aligning job specifications with actual needs is critical.
Workforce management is changing in pivotal ways. Major global events such as the COVID-19 pandemic are changing it; the ebb and flow of economic dynamics are changing it.
And the endless march of technology and progress are changing it. So it is critical that business owners remain flexible and adaptable to leverage the most from tomorrow’s circumstances.