HR as a Strategic Enabler of Business Success: The Board’s Role in Workforce Planning

In the boardroom, it should be understood that strategies are only as strong as the organization’s ability to execute them. And execution depends on having the right people in the right roles at the right time. To ensure this, organization’s must engage in strategic workforce planning, which is how we bridge the gap between ambition and capability, aligning our people with our business goals and ensuring that we can deliver on our commitments. 

One of the most overlooked board responsibilities is strategic workforce planning. While boards routinely review financial plans, operational goals, and risk management frameworks, they often spend less time on the people side of the equation. Too often, boards leave this crucial function solely to HR, if it is even a practice of the organization at all,  missing the opportunity to engage deeply in workforce planning as a strategic tool.

Why Workforce Planning Matters for the Boardroom

Effective workforce planning is a tool for the board to assess and ensure the organization’s readiness to implement its business strategy. When boards take an active role in guiding this planning, they help the organization foresee and fill talent gaps, nurture leadership pipelines, and align workforce skills with future demands. 

For instance, if a company has a strategic growth plan to expand into a new market, workforce planning enables the board to ask: Do we have the people, skills, and leadership to succeed there? Without an adequate focus on workforce planning, growth plans can stall as teams struggle to meet demand, and leadership may be left scrambling to build capacity on the fly.

Consider a board planning an aggressive digital transformation strategy. Digital transformation involves the implementation of new technology, which will require new skills, adaptive learning, and a culture that embraces change. If boards do not ensure that strategic workforce planning includes these skills, they may find themselves burdened by change-resistant mindsets and capabilities that can’t keep up with digital demands. By making workforce planning a regular part of the board’s agenda, directors can help ensure that HR is building the digital skills pipeline, assessing future capability needs, and fostering a culture ready to adapt to digital shifts.

Practical Steps for Board Members

So, how can boards actively contribute to strategic workforce planning? Here are a few practical steps:

1. Establish Workforce Planning as a Standing Agenda Item: Start by making workforce planning a regular part of board discussions. This involves reviewing talent metrics alongside financial metrics to assess the organization’s health and readiness. For example, does the workforce have the necessary skillsets to meet current and future demands? Are we seeing retention challenges in critical areas that may jeopardize our ability to execute our strategy?

2. Request and Review a Skills Gap Analysis: Ask HR to provide an annual skills gap analysis, highlighting where current workforce capabilities may fall short of future needs. This analysis can be a useful tool for assessing where investments are needed to close skill gaps. For instance, if the analysis shows a shortage of data analytics expertise, the board can discuss whether to recruit externally or invest in upskilling the existing workforce.

3. Set Expectations for Succession and Leadership Development: Succession planning is essential, particularly in an era where leadership needs are great and skilled talent shortages even greater. The board should expect HR to have a solid and credible succession plan, not just for the CEO but for other critical roles that drive strategic initiatives, even beyond the C-suite. Board members can work with HR to ensure that competency development programs -and their implementation- are aligned with the strategic direction, focusing on skills that the company will need three, five, or even ten years from now, rather than just filling immediate gaps.

4. Challenge Assumptions about Talent Supply and Demand: Boards should question assumptions about talent availability, especially in high-growth or high-demand areas. If HR assumes talent can be easily hired in a new market or for emerging roles, the board should probe these assumptions. What are the recruitment challenges in this market? Are we prepared financially and from a culture perspective to compete for scarce talent, or would it be more strategic to invest in developing our own people?

Real-World Example: Anticipating Skills for an AI-Driven Future

A retail company, aiming to lead in AI-driven customer service, realized that its existing workforce lacked the specialized skills to drive this vision. The board had approved a significant investment in AI technology but hadn’t initially considered the human capital side of this transformation. Not surprisingly, the initial rollout stalled. The board requested management to prepare a targeted workforce plan, which included building  AI expertise internally while recruiting selectively in critical areas. By helping HR in the aligning of people strategy with business goals, the board was able to support a more sustainable transformation, ensuring the right talent pipeline was in place to achieve the company’s strategic aims.

The Board’s Commitment to Workforce Planning

Ultimately, workforce planning is a continuous process of aligning talent with strategy, and not a once-a-year exercise. For boards, the goal is to provide oversight that ensures the organization has the skills and capabilities to meet its objectives today and tomorrow. By integrating workforce planning into strategic discussions, boards mitigate risks while actively enabling the organization’s growth and resilience.

In upcoming posts, I’ll address how boards can better address human capital risks. In the meantime, I encourage boards to view the HR function not as an operational concern but as a strategic imperative essential to executing business strategy.