Strategic Workforce Planning & Analytics DuringUniversity Sector Change10th Universities HR Benchmarking Conference1 November 2013

Ephraim Spehrer-Patrick,Workforce Strategy & Planning LeaderPacific

Olivia Tsen,Principal, TalentLeadership & Organisational Performance

MERCER 1

Strategic Workforce Planning & Analytics DuringUniversity Sector Change

1. University Sector Context

2. Strategic Workforce Planning

3. Workforce Analytics

4. Case Study: OECD

Q & A

Agenda

MERCER 2

Strategic Planning...... requires managing contradictions

Universities today face a range of contradictions … and tough choices

Have talent surpluses in some areas… skill shortages in other areasand

Value and seek diversity andspecialisation… benefit from a cohesive cultureand

Want efficient structures andprocesses…

place growing emphasis on innovationand leadershipand

Are constrained by remunerationframeworks… need to retain top talentand

Desire to increase use of technologysolutions

compete with online educationprovidersand

Need to provide clear vision andstrategy…

are less certain about some futurechallenges and changesand

MERCER 3

Dynamics Potential workforce & organisation impacts

University SectorDrivers for more strategic workforce management

• Difficulty attracting• Highly mobile workforce

(Gen X, Y and Z)• Loss of talent to

professional practice

• Differentiating as an employer• Inspiring leadership needed to attract talent• Casualisation of workforce• Ability to attract research funding and best

and brightest staff and students

GlobalCompetitionfor Talent

• Demand driven funding• Increased competition• Cost constraints• Restructuring faculties /

schools /departments

• Diversifying revenue streams• Retention and engagement• Greater accountability for results• Clearer performance standards• Change management

FundingPressures

• Skill shortages• Ageing populations

DemographicShifts

• Global mobility and recruitment• Loss of specialist knowledge• Reputational risks• Online learning and teaching capability

• Skill shortages inspecialist areas

• Ageing population• Technological

innovation

DemographicShifts

MERCER 4November 6, 2013

Strategic Workforce Planning & Analytics:Mercer’s Point of View and Approach

MERCER 5

* According to research from Bersin & Associates, 2011: “developing advanced workforce planning capabilities”

Crucial process – helps HR leadersprioritise Science + Art

One of the leastdefined HRprocesses /disciplines

Ranked one of thehighest priorities *

Analytics +Planning

Strategic Workforce PlanningWhat is it?

MERCER 6

Strategic Workforce PlanningWhat it is – and what it isn’t

ResourceAllocation

Performance &Development

Process

CareerPlanning

StrategicWorkforcePlanning

Operational Strategic

Functionlevel

Individuallevel

It is

future-oriented

goes beyond the one-yearhorizon

focused on critical workforcesegments

MERCER 7

Workforce planning is a systematic process for identifying and addressingthe gaps between the current and future workforce resources and needs.

Strategic Workforce PlanningDefined

It provides a rational basis for prioritising, developing, and funding thepeople practices to support the university strategy and objectives.

Right LocationRight People Right Time with theRight Cost

MERCER 8November 6, 2013

Funding / BudgetFunding decline or increase

Increasing productivity requirements

Increasing revenue

Programs / CoursesPolicy changes

New programs or courses

Consolidation of programs orcourses

OperationalNew technology

Process improvements

... to deliver specificoutcomes

Workforce scenariosthat focus on…

3 – 5 yearscenarios

Strategic Workforce Planning...... starts by understanding where the university isheaded, and the turns it could take.

Re-calibrating for change

Increasing productivity

Improving performance

Investing for futureexpansion

Building capabilities fromwithin

Costs Counts

Capabilities Structure

Locations

MERCER 9November 6, 2013

Strategic Workforce PlanningKey process steps

Workforce Solution Design(Workforce Plan)

Workforce Analysis(Supply, Demand & Gap)

Strategic Setting &Preparation

Understandorganisation strategy

drivers

Analysing currentworkforce structure

Identifying criticalcapabilities and roles

Current & FutureWorkforce Supply

Current & FutureWorkforce Demand

GAP ANALYSIS

LOCATIONPEOPLE TIME/COST

Buy Solutions(recruiting, co-& outsourcing, partnering)

Build Solutions(developing, retaining, insourcing)

Redeploy Solutions(exit, transfer, turnover)

A Workforce Plan describes actionable solutions and their impact on workforce gaps / risks.

STRATEGICWORKFORCE

PLAN

MERCER 10November 6, 2013

Workforce Planning – Review of last decadeFour Archetypes of Alignment

Slow to react

Dem

and

01‘-02‘ 03‘-04‘ 05‘-06‘ 07‘-08‘ 09‘-10‘

Overreaction

Dem

and

01‘-02‘ 03‘-04‘ 05‘-06‘ 07‘-08‘ 09‘-10‘

Business Demand Workforce Portfolio

Cautious

Dem

and

01‘-02‘ 03‘-04‘ 05‘-06‘ 07‘-08‘ 09‘-10‘

Alignment

Dem

and

01‘-02‘ 03‘-04‘ 05‘-06‘ 07‘-08‘ 09‘-10‘

e.g.Energy /Telcos

e.g.Banks /

Consulting

e.g.Automotive/

Manufacturing

e.g.Services /

InvestmentBanks

MERCER 11November 6, 2013

CurrentState

Traditional Planning Scenario Planning

How should we translate our organisation strategy /plan to future workforce demand scenarios?

Appropriate for long-term planning and toforce “out-of-the-box” thinking.

FUTURETODAY

Option AFunding

Increased

Option BFunding

Maintained

Option CFunding

Cut

CurrentState

Appropriate in relatively stable environment.

“Best” case(+10 %)

“Base”case

“Worst”case

(-10 %)

FUTURETODAY

CurrentState

MERCER 12November 6, 2013

Cost Counts Capabilities Location

Role A

Role B

Role C

Role D

Role E

Significant action

No action

Some action

Hot spots

Through this process, hot spots can be identified,leading to a prioritisation of possible actions

MERCER 13November 6, 2013

Mercer / The Conference Board, 2010

Level 1

Level 2

Level 3

Level 4

Budget driven headcount planning

Workforce dashboards

Strategicworkforce

planning & analytics

Humancapital planning

• Headcount data (FTE)• Retrospective, static analysis and

reporting (e.g. cost, basicdemographic data)

• Internal and external labour marketanalysis data

• Benchmarking (e.g. attrition,productivity, HR processes)

• Shared view on critical workforcesegments, capabilities + gaps

• Predictive models and scenarios

• Integrated in organisation strategyprocess

• Organisation-wide governance (e.g.COE for Analytics and Planning)

OPERATIONALSTRATEGIC

Maturity of Workforce Planning & AnalyticsDifferent levels of maturity in organisations

MERCER 14November 6, 2013 14

2013 Mercer Research with the World Economic Forum (WEF)GLOBAL GOOD PRACTICE REPORT

MERCER 15November 6, 2013 15 15

2013 Mercer Research with the World Economic Forum (WEF)TALENT INVESTMENT RISING

FEW HAVE HIGHLY EFFECTIVE TALENT PLANS

MERCER 16November 6, 2013

61% of universities have a strategic workforce plan

PREVALENCE OF A WORKFORCE PLANNING STRATEGY

MERCER 17November 6, 2013

Of those that have a plan, most have a time horizon of 1-5 years

PERIOD COVERED IN A WORKFORCE PLAN

MERCER 18November 6, 2013

Workforce planning strategies are heavily dependent onstudent demand for courses

CONSIDERATIONS WHEN DEVISING A WORKFORCE PLANNING STRATEGY

MERCER 19November 6, 2013

The Analytics Journey

MERCER 20November 6, 2013

Survey participants

UNIVERSITY BASE NUMBER OF FTE

*Other: includes universities in New Zealand

MERCER 21November 6, 2013

Reactivechecks

Simulations& forecasting

Correlations

BenchmarksOn-goingreports

Causalmodeling

Anecdotes

Measurement continuum

Moving from ‘I Think’ To ‘I Know’

Leastpowerful

Mostpowerful

MERCER

22Mor

eSo

phis

ticat

ion

Less

50% of universities mostfrequently use basic workforceanalytics.The remaining 50% useexternal or internalbenchmarking.No universities are using moreadvanced analytics

CURRENT ANALYTICS

Basic analytics such as ongoing headcount/turnover reportsare most frequently used

MERCER 23

Projections and forecasts are approaches that will enableuniversities to make better workforce decisions

Mor

eSo

phis

ticat

ion

Less

Better workforce decisions aremade as a result of moresophisticated workforceanalytics such as futureforecasts and projectionsbased on current data

WORKFORCE PLANNING

MERCER 24

Vice Chancellors and Senior Executives, Managers and HR areall interested in the use of workforce analytics

INTEREST

Survey participants stronglyagree that HR leaders andSenior Executives and VCsare interested in workforceanalytics (e.g. projections,simulations, predictivemodelling)

MERCER 25

HR functions have the skills to conduct basic analytics

Basic Analytics

SophisticatedAnalytics

HR SKILLS

• Most HR functions have the skills and capabilities to conduct basic workforce analytics such as ongoingreports and benchmarks

• However, many lack the skills to perform sophisticated skills such as projections, simulations and predictivemodelling

Strongly disagree

MERCER 26

Workforce analysis is generally completed by aCentre of Excellence (CoE) consisting of ~0.5 – 2 FTEs

RESOURCING

23% haveworkforceanalyticsdecentralisedthroughoutthe university

9% are currentlydecentralised but haveplans for COEwithin 12 months

68% of universities completeworkforce analysisin a Centre of Excellence

76% of universities have 0.5– 2 FTE responsible forworkforce related analysis

4% of universities have0 FTE responsible forworkforce analysis16% of universities

have 3 – 5 FTE inworkforce analysis

4% of universities have6 - 10 FTE responsiblefor workforce analysis

MERCER 27

Universities want to use workforce analytics to supportworkforce planning and drive efficiency gains

REASONS FOR FUTURE USE OF WORKFORCE ANALYTICS

MERCER 28

FOUNDATIONAL ADVANCED

Output

Information

Uses

Tools

Counts, rates, and tabulations

WHAT is happening:What is our turnover rate?How many promotions didwe make?What are spans of control?What is current productivity?

Reporting (internal and external)Tracking progress toward goalsMonitoring trends

Business intelligence

Proven cause-and-effectrelationships

WHY | HOW to change it:Why do people quit?What experiences are linked toadvancement?What are optimal spans?How can productivity increase?

Analyse alignmentInforming policy decisionsDirection to achieve goals

Statistical modeling techniques

The Journey: Two Categories of Measurement

MERCER 29

• Every organisation has aninternal labour market –either by design or default

• People come in, advance,and leave

• Employees play to theorganisation’s values……rules…rewards

• Leadership’s choices andinvestments produceexceptional, nominal, ornegative effects

• Descriptive analysis

The Concept (1 ) ILM Mapping

• Causal analysis (drivers)

(2) ILM Analysis®

Internal Labour Markets (ILM)Combining Foundational (1) with Advanced Analytics (2)

Promotions

7

6

4

8

5

3

HIRES EXITSCAREERLEVEL

LateralMoves

Total Employees

MERCER 30

The real power of ILM analysis® comes from measuring andmodeling the drivers of these talent flows

11

72

125

190

312

116

Hires17

49

123

184

227

86

Exits

Promotions

7 517

6 640

4 963

Level 8 168

5 830

Careerlevel

3 383

Lateralmoves

234

45

341

186

81

38

16

81

85

134

129

Totalworkers11

72

125

190

312

116

Hires17

49

123

184

227

86

Exits

Promotions

7 5177 517

6 6406 640

4 9634 963

Level 8 168Level 8 168

5 830

Careerlevel

3 3833 383

Lateralmoves

234

45

341

186

81

38

16

81

85

134

129

TotalworkersKnow who

you areselecting

Know whatyou are

rewarding

Know whataccounts forperformancedifferences

Know whatretains

employees

MERCER 31

Advanced Analytics: Example for ILM Analysis®

Previous surveys ofperceptions

suggested that pay andworkload were mostcritical to employee

commitment.

The analysis of actualbehaviour showed

that career opportunitiesmost affected retention.

Previous surveys ofperceptions

suggested that pay andworkload were mostcritical to employee

commitment.

The analysis of actualbehaviour showed

that career opportunitiesmost affected retention.

The models on which these results are based control for individual attributes, organisational factors, and external influences.

Disguised case example

MERCER 32November 6, 2013

Case Study:Organisation for Economic Co-operation andDevelopment (OECD)

MERCER 33

People ImperativesBusiness Situation

Increasing importance ofgeneralists to complement existingspecialist staff

Develop a more efficient andflexible talent deployment model

Maintain engagement underincreasing cost constraints

Global economic power shift (G7to G20) resulting in increasingbreadth of member needs

More demands for multi-disciplinary research

OECDThe Value of Drivers Analysis

MERCER 34

ILM Map (3 year timeframe)

From outside | from temp role Voluntary | total

1|41|4

17|617|6

19|919|9

76|676|6

40|140|1

7|07|0

5|05|0

9|99|9

17|2417|24

9|129|12

7|187|18

3|103|10

20|5620|56

12|4412|44

5|145|14

3|93|9

6|206|20

10|2710|27

4|94|91

18

27

21

2

15

30

12

4

Promotions

1|51|56969

109109

310310

249249

282282

4646

446446

339339

121121

5151

B5, B6

B4

B3

B1, B2

C

Grade Hires: 200|68Hires: 200|68

<9>

<10>

<16>

<5>

<3>

<Laterals: 69> Exits: 71|212Exits: 71|212Average active employees: 2,022Average active employees: 2,022

10

A6, A7

A5

A4

A2, A3

A1

<2>

<3>

<7>

<13>

<1>

MERCER 35

-85%

-77%

-48%

-47%

-44%

-26%

-17%

101%

-100% -80% -60% -40% -20% 0% 20% 40% 60% 80% 100% 120% 140%

Changed Department (within grd)*

Supervisor vs. Individual Contributor

French citizenship

Changed from "temporary"*

Supervisor's span (3+ Ees)

Tenure (5+ yrs)

General experience/age (5+ yrs)

Pay increase

Annual salary

Promoted this year

Changed job or job family (within grd)

Rating: Outstand vs. Satisfactory*

Percentage difference in probability of voluntary turnover next year

More likely to quitLess likely to quit

Turnover Drivers AnalysisImportance of lateral movement, supervision, and performance

No effect

The models on which these results are based control for individual attributes and organisational factors. All effects are significant at the 5% level unless otherwisenoted. Models account for Departments, Grades and Job Families. *The effect is significant at the 10% level.

MERCER 36

-64%

-30%

-22%

14%

30%

46%

68%

93%

137%

176%

-100% -50% 0% 50% 100% 150% 200%

Promoted this year

Annual salary (€10k+)

General experience/age (5+ yrs)

Changed job or job family (within grd)

Tenure

Level to supervisor (1+)

Supervisor's own span (2+ Ees)

Took management training

Rating: Outstand vs. Satisfactory

Rating: Excellent vs. Satisfactory

Changed Department (same grade)

Supervisor vs. Individual Contributor

Percentage difference in probability of promotion next year

More likely to be promotedLess likely to be promoted

The models on which these results are based control for individual attributes and organisational factors. All effects are significant at the 5% level unless otherwisenoted. Models account for Departments, Grades and Job Families. *The effect is significant at the 10% level.

Progression Drivers AnalysisMobility & supervision also strongly linked to employee success

MERCER 37

BUILD HR Strategy

Workforce Planning & Analytics

RUN Employee Lifecycle Management

Recruitment,Selection

&Onboarding

Compensation&

Benefits

PerformanceManagement

Administration (Payroll, Employee Benefits, Time Mgmt, Mobility, etc.)

Development&

Mobility

Retention&

Exit Mgmt

Talent Management

SWFP &analytics waskey input to

align programsalong theemployeelifecycle

SUSTAIN Communication, Change Management, Organisational Development

SUPPORTOrganisation & Roles HRIS (eHR)

Summary of InsightsImpact on rewards, mobility, development and communication

MERCER 38

The crux of workforce planning is enquiry, not justnumber crunching.

You need both broad directional insights and granulardetails about your workforce.

Your workforce plan should tell a story. Even basicanalysis can provide some clarity. Leverage the datayou’ve already got.

Make process and tools simple and efficient to use, andfind the right people (skills) to support the process.

Workforce planning is not an “event”; build capabilitiesover time; don’t do it all at once.

1

2

4

3

5

Closing thoughts and lessons learned

MERCER 39

Principal, Human Capital Strategy &Workforce Planning Leader, Pacific

Phone: 02 8864 6463Email: ephraim.spehrer@mercer.com

Ephraim Spehrer-Patrick

Principal, Leadership & OrganisationalPerformance

Phone: 03 9623 5223Email: olivia.tsen@mercer.com

Olivia Tsen