Strategic Workforce Planning - Semantic Scholar...Why do we need Strategic Workforce Planning? ......

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Strategic Workforce Planning

2017


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Agenda

What is Strategic Workforce Planning?

Why do we need Strategic Workforce Planning?

The evolution of Strategic Workforce Planning

Practical framework to mitigate workforce risk anddeal with the challenges of change

Challenges of implementation

Building a business case

What isStrategic Workforce

Planning?

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What is Strategic Workforce Planning?

People support most of the strategic capabilities andpeople have the skills needed to deploy the strategy

‘People make the strategy happen’

Strategic workforce planning is the practice ofmapping an organization’s people strategy with itsbusiness strategy so they work in sync.

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…is a proactive approach which plans to provide:

The Right People (numbers and skill set)

at the Right Place (location, roles)

for the Right Time (duration)

at the Right Cost (pay and rewards).

to ensure successful completion of business objectives.

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Two Critical Advantages

It helps leaders understand whether they have or canobtain the workforce to execute their businessstrategy.

It also assists HR leaders in reorganizing, shaping,and deploying the workforce to deliver on theircompanies’ business objectives.




Why do we needStrategic Workforce

Planning?

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Centre for Generational Kinetics, 2015

What Does the Future Hold?

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The Deloitte Millennial Survey, 2016

Will They Stay or Will They Go?

> 6 months6 months to 1 year> 1 to 2 years> 2 to 5 years> 5 to 10 years> 10 yearsWould never leaveDon’t know

11%

7%

22%

19%

12%

13%

5%

11%

66%27%expect to leaveexpect to stay

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Increasing Importance to organizations

Workforce Demographics– Loss of ‘baby boomers’ from the workforce and lower birth

rate means the workforce will decline by 29% by 2050

Changing Career Patterns– Traditional retirement in the early sixties has been

replaced to an undefined retirement age

– Expectations of greater job fulfilment, flexible employmentpatterns are majorly shifting career paths




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Did you know?

of the jobs in the 21st centuryrequire skills possessed by 20%of the workforce60%60%

Job skills and competencies required in the future arechanging faster than the skills training being provided

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Current and Projected Labour Shortages– Despite investment in higher education, there are

significant skills gaps in scientific, technical, engineeringand maths disciplines.

– Some 80 per cent of the talent gap in organizations stemfrom a lack of appropriately qualified candidates.

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Globalization/Flexible Workforce

– As the mix of employment arrangements becomes morediverse, managing these relationships and evaluating thecosts and benefits of different staffing scenarios becomesimportant

– Many company’s businesses shift to emerging markets,which means employers must weigh the costs and benefitsof shifting their workforce to these locations

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Mergers and Acquisitions

– As the result of a merger or acquisition, companies needto assess gaps and redundancies and expand their talentmanagement strategy

Evolution of Technology and Tools

– As technology becomes more sophisticated, andorganizations succeed in integrating their IT systems anddatabases, they reach a higher plane of possibility, forexample: workforce analytics, metrics

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Plan for Uncertainties and Anticipating Change

– Companies will need to adapt, so they can keep thebusiness running smoothly with one hand, while preparingfor a different future with the other

• Political uncertainties• Regulatory changes• Economic conditions• Market/Industry changes

The Evolution ofStrategic Workforce Planning




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Evolution of Workforce Planning

Headcount Planning

Workforce analysis is on internal factors only

– e.g., supply/demand gaps

Assumption that a stable environment exists

Business decisions made at this stage exposes alarger amount of risk

Forward looking time plan is very short

– e.g., recruitment plans to address gaps

No linkage to the business strategy

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Workforce Analytics

Focus on internal trend analysis

– e.g., metrics, relationships among key variables

Measures of turnover, engagement and performancereview data to determine upward/downward trends

May include data from Finance department

Data examined is longer term and both present/past

No linkage to the business strategy

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Workforce Planning

Both internal trends and external factors areconsidered for impact on labour

May include data from Risk Management orBudgeting department

Begin to focus on predictive capabilities, creatingforecasts incorporating multiple ‘what if’ scenarios(Forecasting and Scenario Modeling)

Still disconnected from business strategy

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Identifies roles that have greatest impact on businessobjectives

May include data from Marketing department

Aim to protect and develop those skills to ensure apipeline for future (hard to fill or skills that take along time to develop)

Business strategy drives business objectives

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State of Workforce Planning

SWP remains in its infancy in many organizations andthose leading the workforce planning function haverealized that it is a journey of several years both inexecution and leadership adoption

?

A Practical Framework forStrategic Workforce Planning




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When developing the framework for your organization’sstrategic workforce plan, there is no ‘one’ official framework

The framework can be quite simple. Complexity is addedwhen you try to execute each of the steps within the existingframework of your business

Most planning is structured as a 3-5 year plan

Plan length varies by market instability, industry maturity,technology adoption, business growth, etc.

Building a Framework

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Strategic Workforce Planning Framework

Determine roles of interest

Establish the current state and analyze historical trends

Determine desired forecasting scenarios

Perform gap assessments (in headcount and skills)

Establish action plans

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Step 1: Roles of Interest

Focus on roles that yield the most value (which ones arecritical or pivotal to the company?)

Assess the roles and not the people in the roles Classification of roles can be impacted by corporate

cultureFor example:

• Silos = all roles are important• Difficult financial times = nervous

May be easier to explain “looking” at roles tied to theexecution of the business strategy in the next 3-5 years

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2x2 Grid Method

Dif

ficu

lty

toO

bta

in

Importance to the Business

Strategic HR

Tactical HR

• Competitors in same area• Desirable work location• University produces

graduates in field

• Broad decision making• Across organization

boundaries• Adapts to changing

circumstances

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Segmentation

Role Category

Strategic Drives strategy

Core Directly supports strategic core

Supportive Needs to be in place to move forward

Misaligned Redeploy

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Differentiated Workforce

1. Assess the Strategic Choice– How will we compete?

2. Identify Strategic Capabilities– What must we do exceptionally well to win?

3. Identify Strategic Positions– Is there significant amount of variability in the performance

levels of employees in these roles?

4. Identify behaviours to classify employees as A,B,C– Remove C’s from A roles, place A’s in A roles, set development

targets for B’s in A roles




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Step 2: Current State and Historical Trend

Create a master list of significant past events

Determine impact of events on critical rolesidentified (added or subtracted from headcount)

– e.g., acquisition, restructuring, outsourcing, economicdecline forcing a hold off of retirement plans, added newskill set requirements to the role, could link to turnover

Typically, 3-5 year timeline

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Step 3: Forecasting Scenarios

Run scenarios of the future, focused on critical rolesidentified

SWOT analysis can be useful

Determine scenarios with internal customers

– e.g., factors affecting the business may alreadyhave been analyzed to determine strategicobjectives or financial plans

If HR tries to develop these scenarios on their own,they are less likely to be viewed as credible

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Step 4: Gap Assessment

Headcount gap – determine internal supply– Natural attrition rates (approx. 5-year trend)– Retirement predictions– Internal career moves– Acquisitions, consolidations and opening new

locations– Revenue growth/decline, efficiency gains (redundant

talent)

Competencies gap– Skills/competencies of today and tomorrow

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Step 5: Action Plans

Identify who is impacted by the scenario outcomesand create an action plan for each– Recruitment team, training group, IT department for

computer/software needs, finance budgeting, benefitsgroup for financial/administrative impact

Establish costs associated with each action plan– Implementation cost vs. more than a one-time cost– e.g., Hire from outside or train staff, cost of loyalty of

remaining staff if termination vs. retraining

Identify risks of action plan– If it’s cheaper to buy talent, is talent available?

What are the challengesof implementing a

Strategic Workforce Plan?

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Challenges to Successful Planning

Strategic Workforce Planning is Complex– A workforce does not behave in linear fashion; it flows as

people are promoted or transferred, take sabbaticals,resign, and retire

Business Conditions Change Swiftly– HR strategies also must be reviewed and updated regularly

to account for opportunities and threats as they arise

Lack of Resources– Collecting information is an ongoing activity and can take

several years to see results




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Challenges to Successful Planning

Technologies– Inconsistent numbers can destroy strategic workforce

planning’s credibility. Technology is needed to establishconsistent, organization-wide data collection

Environment– Developing sound models and proving their reliability is

more difficult in business units or functions whereheadcount and turnover rates are lower

Strategic HR Partner– Identifying business strategies: It’s here that HR develops

or deepens understanding of the business plans, and helpsthe business leader think through the people impacts

Building a Business Case

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of organizations have recruiting as one of

their top three priorities

of organizations have goal and

performance management as the nextpriority

PwC Annual HR Technology Survey

54%

47%

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What’s the Rationale?

Aging demographics is probably the number one justification forworkforce planning today

Business units are more able and willing to work with HR toidentify specific roles that, if left unfilled, could damage theorganization's bottom line and simultaneously deliver greaterreturns if properly filled

Large mature organizations may have areas of growth and areasof decline – a need to gain efficiencies to maintain profitability

Growth modes and releasing talent on downturns – savings onshortages and surpluses

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Tie to the Business Plan

Learn the business logic

The forecasted economic conditions

The impact of possible political uncertainties andelections

Market and industry conditions

Changing technologies

Possible changes in regulations

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How does it deliver value?

Supports the budgeting process

Supports the strategic/business planning process

Acts as a mechanism for identifying critical roles

Identifies shortage of qualified talent to fill criticalroles

Serves as a mechanism for identifying critical talent

Identifies skills gaps in the workforce




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7 Tips for SWP Leaders

1. Build a business case to convince importance to thecompany’s future over other initiatives

2. People doing SWP work are typically one level belowthe people who support and fund the concept, findallies in functions outside of HR

3. Leaders may not know what they need. Logic first,numbers later

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7 Tips for SWP Leaders

4. Build on previous success, such as successionplanning, or pilot SWP in select business units

5. Establish definitive and consistent data that will beused company wide

6. Create a common language to describecompetencies, jobs and other workforce data

7. Ensure that data is updated regularly

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“Bringing together the right information with the rightpeople will dramatically improve a company’s ability todevelop and act on strategic

business opportunities.”

Bill Gates, former chief executive and current chairman of Microsoft

Summary

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Be proactive of right people, right place, right timeand cost

Determine critical roles Establish the current state and analyze historical

trends Determine desired forecasting scenarios Perform gap assessments (in headcount and skills) Establish action plans

Build your case

Strategic Workforce Planning - Semantic Scholar...Why do we need Strategic Workforce Planning? ......

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