In many organizations, the focus of workforce scheduling lies in solving the operational puzzle on a day-to-day basis, often within the boundaries of inflexible budgets and expected SLAs, while forgoing the investment in long-term strategic and tactical planning needed to optimize the bottom line. This often results in less-than-optimal usage of the flexible workforce layer and a chaotic work environment for the contracted employees.

Thomasson sees strategic workforce planning as essential to shifting this mindset. By looking months, or even years, ahead to workforce needs and developing scenarios, businesses can better align their staff with anticipated changes in customer demand and market trends. “This not only prevents high costs but also leads to improved performance and increased employee satisfaction,” says Thomasson.

“There’s a growing awareness that your workforce composition directly impacts your operational KPIs.”

Strategic workforce planning involves managing staffing needs for the long term, typically months to years in advance, from a supply/demand perspective. “We notice that strategic workforce planning tends to be overlooked because the focus is usually on short-term planning,” Thomasson explains. Long term planning is done, but it is not supported by the same data-driven insights as advanced short-term planning. By taking a data-driven holistic approach, with the aid of machine learning and advanced scenario management, significant benefits can be achieved. “Our goal is to strike a data-driven balance between staffing demand and supply over an extended period.”

“You aim to configure your workforce so you’re ready for whatever the future holds,” Thomasson says. This process closely aligns with an organization’s business plan, and can extend from one to even two years into the future. “Two years is genuinely long-term, but certainly achievable. You have to keep in mind how long employees generally stay with your company.”

Distribution centers face challenges like staffing shortages, high costs of temporary workers, and significant turnover. “Employees often switch jobs quickly for better pay or more pleasant working conditions,” notes Thomasson. Meanwhile, global uncertainty requires companies to build resilient workforces capable of handling various future scenarios.

Automation is increasingly significant in distribution centers. Companies like Albert Heijn and Hoogvliet invest in automated systems to control labor costs and shortages. However, automation isn’t a cure-all, Thomasson notes. “At Albert Heijn, only a portion of products can be processed by robots. Humans must still handle the rest.” Automation impacts the ideal make-up of the workforce, resulting in a need to recalibrate the ‘new optimum’.

The World Economic Forum predicts that AI and automation will create 12 million more jobs than they eliminate by 2025. “This suggests that companies advancing these technologies will positively contribute to society in the long run,” Thomasson says. Automation will inevitably alter job needs—both in quantity and nature. “How extensively will robots replace employment? How will the type of work change? Strategic workforce planning is vital precisely to prepare for these shifts.”

Strategic workforce planning is particularly relevant for distribution centers, where shifts in labor demand and automation have a direct operational impact, and where service levels need to be carefully weighed. Viewing this challenge through a more holistic lens reveals a key insight, says Thomasson: there are multiple ways to achieve a certain service level. “You could hire an army of flex workers that cost a fortune, and don’t show the same efficiency as an experienced, own workforce. Or vice versa; many fixed employees that get the job done in an efficient way, but don’t give the same amount of flexibility as flex workers. Striking that balance is essential in achieving operational excellence at acceptable costs.” Thomasson advocates for an integrated approach that aligns HR and operational KPIs. “Currently, these metrics are often tracked in isolation,” she explains. “Our goal is to connect them. Which contract mix yields the highest productivity? Is it more cost-effective to absorb a temporary dip in production or bring in a high-cost, last-minute flex worker? These are the kinds of trade-offs we help organizations evaluate.”

Machine learning plays an increasingly crucial role, Thomasson explains. “It helps identify patterns: which team or contract composition yields the best results?” Additionally, machine learning improves forecasting and offers proactive support. “A future tool could continuously calculate in the background, alerting you of imminent shortages or surpluses,” she says. “It would act like a personal assistant, integrating HR aspects with operational impacts.”

“With machine learning, you suddenly see clearly which team or contract composition genuinely works.”

Data quality is often a concern in data-driven projects, but is generally not an issue here. “HR data is typically reliable because it’s essential for payroll and other obligations,” Thomasson says. Linking this data to scenarios allows early intervention in staffing costs and capacity. For instance, what happens if you hire more permanent employees or adjust the hiring pace?

Strategic workforce planning allows businesses to respond to market changes, like e-commerce growth. “During COVID, Albert Heijn saw an explosion in online orders,” Thomasson says. “That changes operational needs. Do you need different skills or more evening staff? You can calculate that strategically.” Distribution centers often require different workforce strategies for online versus offline streams.

ORTEC sees substantial opportunities for retailers with distribution centers. “These companies recognize the issues—the shortages of staff, and the high costs of ad-hoc solutions,” Thomasson says. “We propose addressing this earlier in the process to avoid last-minute hiring.” Available HR data allows ORTEC to quickly perform analyses and create scenarios. “We have the technology, data expertise, and sector experience to tailor solutions alongside clients,” Thomasson adds.

Strategic workforce planning transcends simple staffing. The goal is to provide insight into the entire chain, from customer demand to operational capacity and staffing. With machine learning, scenario planning, and ORTEC’s extensive supply chain experience, companies can control costs, enhance performance, and remain resilient amid uncertainty. “It’s not just about saving money,” Thomasson concludes. “It’s about building a workforce ready for the future, to continue meeting customer expectations.”

Join our free webinar “From Factory Floor to HR Office” on June 24 at 12:00 AM ET and discover how to align HR and operations through strategic workforce planning. Register now