Many talent leaders see traditional workforce planning as a rudimentary process with limited strategic value to their organizations. Possibly owned by HR or maybe within the business, planning usually consists of analyzing headcount and compensation data to direct future labor expenditures. This planning may forecast turnover and identify recruiting needed to focus on replacements, and in some rare cases, growth.
Most planning initiatives are logical, combine the necessary elements of due diligence in forecasting, and produce an array of comprehensive reports, plans and expected deliverables. Some organizations sprinkle in some competency or skill gap analysis to either prescribe employee development to meet the organization’s talent needs through the existing workforce, or give recruiters something to shoot for.
However, in some organizations, workforce planning is beginning to take shape as a strategic process allowing HR to predict and plan an organization’s talent supply and demand — based on qualitative and quantitative data — to support the overall business goals and strategy.
These companies realize that workforce planning is an organizational initiative, not an HR initiative. Therefore, like other multi-disciplinary programs, workforce planning receives senior leadership support and direction to ensure enterprise-wide adoption and participation. A successful workforce planning effort is often co-sponsored, co-developed and executed by HR and business leaders working together, rather than HR working in a vacuum.
How to Begin
Successful workforce planning requires an approach that focuses on the organizational goals as the primary driver to develop actionable workforce plans, and talent management roadmaps that take into account both the supply of, and demand for, critical talent.
Understanding talent supply starts with environmental scanning to identify the internal and external talent available to the organization. Internal talent supply refers to the organization’s own capabilities, while external supply refers to full-time, part-time and contingent workers available outside the organization.
To accurately assess talent demand, and ensure alignment between HR and the organization’s goals, workforce planning must be an integral part of business planning. HR must work with senior business leaders to understand and participate in creating the organization’s short- and long-term business plans and objectives. As an HR leader, the outcome of these engagements should be a clear understanding of the business’ goals and the specific talent needed to meet those objectives.
HR’s role is to use its understanding of job profiles to conduct a role segmentation exercise to ensure it can accurately differentiate how specific roles will meet corporate objectives. When conducting the role segmentation exercise, HR should first identify the most strategic, critical roles. These roles are the most pivotal in driving organizational success, but they are often the most difficult to identify.
Here is where the idea of running lean comes in. Running lean is not about doing more with less, it’s about leveraging the best talent to do more. To run lean, organizations need to look at their talent management processes through a different lens to understand what talent requirements are needed to meet business objectives.
In this environment, there will be roles that are strategic, critical, supporting and misaligned, and all are impacted in the execution of the business strategy. It is HR’s job to determine which class the organization’s individual talent falls into — and what to do with each group once they are slotted.
A typical segmentation of roles might look something like this:
• Create competitive advantage.
• 10 to 15 percent of roles are pivotal at most organizations.
• Typically related to generation of sales, revenue, product development or service delivery.
• Significant organizational risk in terms of top-line performance if not filled with top talent.
• Directly related to operational excellence.
• 20 to 30 percent of jobs are critical at most organizations.
• Typically related to fulfillment, purchasing or customer support.
• Some organizational risk in terms of top- or bottom-line performance if not filled with the right talent.
• Valuable and required to sustain day-to-day operations.
• 50 to 60 percent of roles are supporting at most organizations.
• Focused on transactional, process or administrative support work.
• Short-term or isolated organizational risk if not filled with right talent.
• Limited or low value to the organization’s operations.
• 0 to 10 percent of roles are misaligned.
• Jobs can be easily redeployed or outsourced; people should be retrained, reassigned or eliminated.
• No organizational risk if not filled with the right talent.
Truth and Perception
As talent leaders identify strategic roles that are pivotal to organizational success, they should adjust their perceptions and understand exactly what it means to create a competitive advantage. The CEO or other business strategist comes to mind when considering the roles that create a competitive advantage for the company. Or, perhaps a product designer or engineer whose brilliance is essential to a key product’s success will come to mind.
These can be, and often are, strategic or critical roles, but consider a past stay at a hotel or a car rental. What would influence someone to stay or rent again, or conversely to vow never to stay or rent again? At the hotel, one might assume repeat business hinges on the front desk staff. They provide the first impression and often set the tone for a guest’s experience. Yet, those individuals are not nearly as important as those who clean the rooms. The smell when a patron walks in the door, the cleanliness of the bathroom, the orderly placement of items, a bottle of water or a welcome note have all been identified as having a greater impact on customer satisfaction and repeat business than the interaction with front desk staff.
In the case of the rental car, one might immediately think of the counter clerk as a pivotal or critical role. Patrons are immediately struck by the friendliness and efficiency of the staff when getting someone settled into a car. However, repeat customers are more often driven by the cleanliness and how the vehicle has been maintained because customers want to feel safe and comfortable with the vehicle they are driving.
The average person might not have flagged the housekeeping staff or rental car cleaner or mechanic as a critical role that delivers a competitive advantage.
Based on research completed by John Hunter and Frank Schmidt, authors of “Individual Differences in Output Variability as a Function of Job Complexity,” published in the Journal of Applied Psychology, top workers are three times more productive than bottom performers and 50 percent more than average workers. This means top performers run circles around average or below-average contributors.
Organizations want top performers in every role, but running lean means focusing efforts on identifying, filling and developing top talent in strategic and critical roles first. Again, this takes some serious thought and often means changing some minds about what functions are critical to the business. For example, is a pilot more important to an overnight shipping company than a bicycle courier? Who provides the customer experience? Who has the greater influence on repeat business?
At the opposite end of the role segmentation are the misaligned roles. Getting lean means honestly assessing job functions that do not directly support the goals and objectives of the business and either eliminating, outsourcing or redeploying the people in these roles. Misaligned roles can occur because of changes in business strategy, market conditions or a host of other factors. Often, it has little to do with the quality of talent in these roles, and the employees can be trained and redeployed to supporting or critical roles.
Talent leaders must honestly assess the roles that have limited impact on an organization’s successful operations and that pose little or no organizational risk if not filled with the right talent. These can then be reduced or eliminated. While this represents a small percentage of the overall workforce, these roles often pose a significant management burden simply because they are not in alignment with the company’s central purpose.
Role segmentation is one small part of strategic workforce planning that can help an organization become lean and drive organizational objectives. Further, this type of specialized activity can help the talent organization shift from a transactional to a strategic paradigm, providing it also continues to evolve and:
• Develops competency models based on proven results and performance, such as top- and bottom-line results that demonstrate the impact investments in HR and talent planning have on business results.
• Predicts how, where and when recruiting is done.
• Designs organizational structures based on emerging business needs.
• Drives leadership development and top talent programs.
• Develops actionable succession management, career pathing and development programs.
Building a Planning Foundation
As talent models mature, new technologies can be leveraged to automate the data collection and data extraction that go into role segmentation and analysis. This will allow HR to demonstrate additional, tangible business results by allowing the human capital element to drive the setting of business objectives.
When properly executed, workforce planning goes beyond simply creating process efficiencies and helps organizations identify critical roles and close the gap between the talent available and the talent needed to propel a company forward. The technology driving these new strategic planning capabilities is in its infancy but holds promise for those charged with forecasting talent needs for the business.
A future workforce planning system will be able to recognize where and when a resource is needed based on the collaborative business/HR workforce planning effort, identify the skills and competencies required to meet the need, and even kick off a recruiting or employee development effort to fill the role with the right talent.
Maybe one day this will all happen automatically. A talent leader will be sitting at his or her desk and get an email that says the system has identified that individual as someone with the skills, competencies and experience to fill a new position in a new department, so please pick up and move there right now.
Brett Addis is a consultant with Knowledge Infusion, an HR consulting company. He can be reached at firstname.lastname@example.org.