How to Put Together a Workforce Planning Team

More and more companies are increasing their efforts in workforce planning (WFP). Organizations of every size and shape — more than 80 percent of them according to workforce research company i4cp’s 2011 WFP survey and report — are engaged in WFP activities, up 6 percent from two years prior. [Editor’s note: Amy Armitage is an i4cp employee]. These activities range from simple operational planning to complex initiatives involving strategic alignment, systems infrastructure, data requirements, analytics, scenario building, communication, cross-functional partnership and enterprise-wide coordination. For many, a critical step is building a good team with the capabilities to do it right.

What kind of talent do organizations need for their WFP team? Who should lead it? What is the optimal structure for the team? Where can talent be found? These are among the questions organizations should ask as they build their internal WFP capability. To assist these efforts, the i4cp 2011 WFP survey collected data from more than 200 HR and business professionals engaged in WFP activities globally.

“Getting the right people with the right skills at the right time,” as WFP is colloquially defined, always has been a core HR focus. Yet WFP in its modern incarnation is a relatively new field. WFP today is based on an organization’s business and talent strategies. It’s tied closely to financial and operational plans, is data intensive and requires sophisticated analytics, skillful communications and relationship building. Only half of the organizations surveyed have been engaged in WFP for more than five years.

There is new focus on workforce planning because senior executives faced with economic uncertainty are more aware of the need to plan ahead and aggressively manage their talent portfolios. Top execs are asking, do we have the right talent to drive future growth and innovation? Are we managing talent risk to ensure top talent is retained and developed? Are the right programs and practices in place to ensure we invest scarce resources in the right place with the greatest return? Further, new technology and the enhanced sophistication of workforce analytics provide new tool sets to manage talent through data.

WFP requires a varied skill set not in ready supply among traditional HR practitioners in areas such as workforce analytics, financial and business analysis, technology application and business consulting. This is the root challenge for organizations attempting to build WFP teams. At the same time, teams also need to work hard to get beyond the numbers, to build personal relationships and to embed workforce planning into the core planning and execution functions of the business.

Strategy and Leadership

Earning credibility with business leaders is an important outcome for WFP activities. WFP is a derivative of the business strategy — what kind of workforce is necessary in the future — as well as a means to ensure its successful execution or get the right people in place to fulfill the strategy. Therefore, workforce planners need to understand the elements of strategy that impact their planning — the competitive and labor market environments that impact the organization, the sources of uncertainty, the trade-offs between different choices and the time frame for action.

However, only 22 percent of organizations in the i4cp study said they engaged in strategic WFP. Strategic WFP requires a closer connection to business strategy and planning, entails detailed needs assessments and scenario planning and typically looks out three to five years. Thirty-six percent of organizations engage in tactical WFP, which includes staffing plans, budget reconciliation and training schedules. Tactical WFP typically looks out no more than a year. The majority of those surveyed, 52 percent, do operational WFP, which includes headcount forecasting, scheduling/coverage and staffing requisitions. Operational WFP, which typically looks out weeks or at most months, is the most basic form of WFP.

This has an important implication for the composition of the WFP team, if the team has its sights on the more strategic aspects of workforce planning. Ideally, it means the WFP leader is involved in development of business strategy — or at least talent strategy — so he or she can align WFP with other strategy initiatives. Only 37 percent of survey respondents reported their organization had someone who is dedicated full-time to WFP as a leader. Seventy percent of WFP leaders are in the organization’s middle management layer — managers, senior managers and directors — and 11 percent are in senior leadership — vice president, senior vice president and executive vice president.

At the upper echelons, it’s also advisable to have a WFP champion — someone who can push for greater attention and resources for WFP activities. The champion should understand the importance of WFP through expertise in the area and should be adept at building support and positive attention for WFP activities. More than half of the organizations surveyed that have neither a WFP team nor a leader did say they have a WFP champion. The WFP champion is sometimes a board member (3 percent), the CEO (17 percent) or another C-level officer (19 percent). More commonly, however, he or she is a vice president, senior vice president or executive vice president (38 percent) or a director (18 percent).

How It’s Done

In addition to an understanding of strategy, WFP practitioners need to have a strong grasp of finance, business operations and technology. They also need to have strong analytical skills, including the ability to forecast using statistics. Of all these skills, forecasting (50 percent) is the most difficult to find, followed by analytical skills (38 percent). Overall, only 38 percent of organizations think their WFP teams possess the skills required to successfully execute their WFP accountabilities. A majority, 59 percent, cited “lack of resources” as the No. 1 challenge to more effective WFP. Some 65 percent of organizations are actively pursuing ways to improve team members’ business acumen, often through simulations to enhance understanding of business analysis, logic underlying business decisions and other means to achieve business outcomes.

Skills related to data manipulation and management are also vital to WFP success. Without the right data and confidence the data are accurate and reliable, WFP cannot get off the ground. If the accuracy and suitability of data behind the models comes into question, line managers’ confidence in WFP can be irreversibly damaged, and whatever initiatives that data supported can fall apart.

Among the most overlooked skills for successful WFP is the ability to communicate the output of complex WFP models to senior leaders. Given the uncertainty of long-term forecasting, workforce plans are often dominated by sophisticated information too complex to get across easily in a single chart or a handful of bullet points. Therefore, practitioners need to tell stories. Scenario building, for instance, can provide simple yet effective narratives about what might happen, why and with what consequences. For example, workforce planners might describe two to three possible futures to engage executives in a dialogue about responses and alternative decision paths.

Where do organizations acquire WFP talent? Since the field is relatively new, most organizations have to look to external sources to populate their WFP teams. Consulting companies are a good hunting ground, since these institutions already have screened for analytical capability and have exposed their junior analysts and associates to business issues that required them to come up with solutions. Other organizations’ WFP teams are perhaps the most productive recruiting targets. With WFP skills increasingly in demand, good practitioners can be lured away with higher compensation and the opportunity to develop in more valued and strategic roles. These recruits already have experience developing workforce plans and can hit the ground running. Ph.D. programs in economics also have proved a valuable source of talent for companies building quantitative capabilities.

Building an Internal Team

While there needs to be an emphasis on buying talent initially, it is equally important to build the talent in-house over time. The majority of HR practitioners did not enter the field with the intention of running regressions or performing other types of quantitative modeling. However, the field requires a more quantitative direction. The i4cp survey showed nearly three quarters of companies use individual development plans, as well as group development and training in equal measure to enhance WFP skills. Increasingly, the data suggests HR practitioners will need to know how to employ data and analytics to drive better human capital outcomes for their business units and WFP team.

Too often the workforce analytics and WFP staff are kept in the background, crunching numbers and producing elaborate charts for their WFP or HR leaders to present. This is the wrong approach. The analysts need exposure to executive concerns to better grasp the issues at hand and develop relationships with the people demanding their services. Greater levels of exposure will promote development of more practical solutions. Needed exposure can come in various forums and in stages, such as inclusion in senior-level operational meetings, independent fact-finding interviews and presentations to different audiences. This is a developmental exercise as well as a retention hook. Given the variety of skills needed to perform WFP, it’s not uncommon for WFP teams to be cross-functionally staffed. I4cp’s 2011 WFP survey shows there is a broad functional representation on WFP teams, well beyond traditional HR practitioners (Figure 1).

The reporting structure is also varied. WFP teams typically reside in the HR function (53 percent) — usually in talent management — but it is not uncommon for them to reside in operations (17 percent) or finance (4 percent). WFP leaders are also typically from HR (65 percent), but can rise from operations (13 percent) and finance (4 percent) divisions.

WFP initiatives sometimes begin in a business unit where WFP is especially critical to success. Its value is then recognized for use in other parts of the organization and, in time, a central or corporate capability is built. This builds an integrated enterprise view — with practical considerations for the entire workforce in all businesses and geographies — and allows greater degrees of freedom to move talent between functions, businesses and geographies and to bridge future talent gaps.

WFP Evolution

WFP is a rapidly evolving field well positioned to address critical strategic issues related to talent risk and long-term talent management. Individuals with analytical training, talent management know-how and business experience are increasingly in demand as critical resources in a balanced WFP team.

The skills needed to do this effectively include data management and analytics, as well as finance, operations, business, forecasting, modeling and communication knowledge. Since combinations of these skills are in short supply in HR, WFP teams need to be cross-functional and include people from finance, operations and other business functions. It is these skills, and a drive to build a strong multifunctional team with a focus on critical business outcomes, that will lead to success in a WFP initiative.

Amy Armitage is the director of member research programs at i4cp. Amit Mohinda is vice president of workforce intelligence at McKesson. They can be reached at