Right now is the once in a work lifetime moment to invest in your workforce plan
Why has the conversation on workforce planning risen recently and how is good SWFP becoming a business imperative?
“People are the engines of innovation and revenue, and the culture you create defines how you do business. They’re the source of your company’s competitive edge.”
Amy Reichanadter, Is workforce planning the new secret weapon for finance?, CPO Adaptive Insights
We have all now seen numerous business articles which look to pin down what the world of work will be like in the wake of the pandemic. How do companies operate, or even benefit from more remote workforces, what leadership and which skills should we value now etc…If we combine this with the consistent truths and trends of the recent past i.e. Demographic changes in much of the western world, such as the ageing workforce, employers recognising the power now lies with the job-seeker, plus the rise of the contingent/freelance/ contract workforce, characterised by zero hours contracts and online agreements, organizations now need to rethink their approaches and business structure in relation to employment, management and training if they are to stay relevant.
The global re-set on how we view workforce practices has given us a one in a work lifetime opportunity to implement good workforce planning practice throughout the whole of an organization.
Despite many organisations acknowledging the importance of workforce planning, few seem to consciously divert purpose and energy into harnessing its capacity for beneficial change. It’s too expensive, or now is not the right time, is what we usually hear. Indeed, even those that practice strategic workforce planning (hereafter abbreviated to: SWFP) routinely are not evaluating their motives or methods for conducting such work thoroughly enough and risk condemning the process to a lengthily tick box exercise.
In fact only...
We believe that SWFP has indefinitely moved from an aspiration or “nice to have” business goal, to an essential for any business that wishes to succeed in the future. Amy Reichanadter writes that we "should care deeply about how and where people are deployed, how well skills and capabilities are aligned to the current and developing needs of the company, how closely capacity meets demand, and how prepared various business units and departments are to hire, on ramp, train, and cultivate employees as the business grows."
Strategic Workforce Planning has one main drawback, it is difficult to do in practice, requires coordination across multiple disciplines and strong leadership to helm it. It is not something that is solved with a large tech purchase, or general sweeping terminology, SWFP rewards careful, information-based scenario planning and analysis. Furthermore recently what CEOs and COOs need from HR in data competence, demands the information obtained through its' effective execution. Yet the effort is worth it and I hope to demonstrate a few of its benefits below…
Future proofing - Factually model a number of scenarios to anticipate and plan for change. Research tells us that organizations that use scenario planning, as is employed in good SWFP, are “2.4 times” more likely to succeed in a digital transformation process, for example. If we consider that “70% of digital transformations do not reach their goals”, this is significant.
Using SWFP ensures business leaders can recognise emerging challenges in the market, workforce and business. It facilitates strategic staffing and planning for future workforce requirements, i.e. gaps in your talent chain, as your organisation can identify staffing needs in a timely manner. For example, are labour costs expected to grow over time along with the business? Do you have employees that are planning to retire soon, and how will that affect the operations of the business? What’s the average attrition rate by department and do you need a process in place to maintain levels for workflow?
Optimises talent - Which employees possess the right skills based on your upcoming scenario? SWFP will help you determine which groups of employees deliver the highest ROI for the business and warrant greater investment in their training and development. For example, organizations that use SWFP see “10% better revenue per employee”, and “12%” better outcomes in “engagement, retention, and succession planning”.
Simultaneously, SWFP will outline what areas need extra resources to reach its full potential and contribute more to the business. i.e. identifying opportunities to retrain staff whose skills are at risk of becoming out of date? SWFP enables you to implement informed retention strategies as without the proper information “HR and managers can misuse raises, bonuses and/or promotions put in place to prevent resignations.”
Know the heartbeat of your business - C-level & senior HR want to be confident and credible with company metrics. Internal and external talent data needs to be quantified, tracked, optimized and monitored in wider context. As talent is the most powerful competitive edge, leadership needs to be fluent on its composition and consequences. SWFP puts accurate human capital data in context of your whole business. By making your approach data-first, you can fulfil the increasingly vocal demands of C suits exec, especially CEO’s and COO’s that HR makes positive business impact with all the data it collects. Less decision must be made on ‘gut feel’ or side-lined with the ‘nice to haves’ and must instead be further grounded in impartiality and evidence. Strategy can then start with unbiased facts and uncover both areas of strength and opportunity driving action and measurable outcomes.
Goal Alignment - Align business HR programmes & policies to business strategy such as “employee assistance, employee benefits, career development, wellness programmes, data protection…” ensuring that those goals are supported in the best way possible and strengthen your companies culture, improve growth and retention and contribute to ROI and business success. SWFP conducted at a business strategy entry point will align business goals with HR strategy. Talent quality and quantity must never be the bottleneck to business success, SWFP connects business strategy with developing the capabilities needed to deliver the plan. “It encourages an understanding of the organisation’s workforce profile; HR strategies and policies are therefore allied with maximising the capacity of the existing workforce and shaping the desired workforce”
Reduce costs - SWFP provides a mechanism for monitoring costs and directly linking expenditure of personnel against business outputs and outcomes. Getting a detailed overview of the people input your organisation needs, together with the productivity levels required for the business to run and grow, will ensure that you’re making the most of the talent you have. “Effective Strategic Workforce Planning should result in a better allocation of resources and lead to better returns on investment in training and development, talent management and succession planning” (Colin Beames, Workforce statregy: Audit survey report, Corporate Research Forum). With many of our customer bases and output being affected as a result of the pandemic, the opportunity to action measurable cost reduction should please everyone.
Harnessing the potential
What we have presented above is by no means an exhaustive list on the benefits of good SWFP, that conversation would take far longer than we have space for here. What needed expressing was the imperative and once in a work-lifetime opportunity that all companies now have to harness the potential in strategic workforce planning
"the real benefit of workforce planning is in the accuracy."
Paul Chance, What are the benefits of workforce planning?, Senior Product Marketing Manager NICE
To have proof on all matters from talent pipelines to productivity. To be impartial, credible and informed in your business strategy, which means elevating HR beyond a human capital supply and administrative role to a key component in the delivery of business success. Aligning on a strategic level for projects and folding them into a workforce plan from the start is the sweet spot on getting a competitive edge with your workforce talent.
An effective SWFP should optimize employee lifetime value and use your data to make smarter hiring decisions and retain key performers. It offers many more opportunities to align the workforce flexibly with peaks and troughs in demand. You will have the intelligence to predict and react with greater accuracy and speed to market developments. Speaking historically, whenever in the past forces have gone into the field of battle, you always want to be the side with the better plan. Knowing how, why and where to deploy your resources in an environment that will change, results in a stronger outcome for your side.
Strategic Workforce Planning should ultimately culminate in a “living” plan, something that is constantly revisited, kept up-to-date, and leads to action and follow-up. A good SWFP is something too powerful to waste. To help you with your planning, please download our handy checklist we have attached at the base of this article for free.
Planning of this kind delivers real ROI, whether that it 10% better revenue per employee, cost reductions across the business or the more than double ratio that your digital transformation project will succeed where your competitors face a 70% chance of failure. The question is not can you afford to invest in SWFP- but can you afford not to.
At Humdex we deliver data driven high-level workforce analysis, which we decode bespoke for your SWFP. If this article has motivated you to action and you want our support to unlock the power of your people data please CONTACT US to find out more.
We work hard at keeping up to date and informed on the latest trends and news affecting the world of people analytics & strategic workforce planning. If you would like to know more about the work we do, then please contact us.
Author -Scott Brent
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