Workforce Planning: The Promise of Integration

Workforce planning is a dynamic and growing function that can deliver strategic organizational benefits. Planning initiatives focus on ensuring a company has the talent it needs to achieve business objectives now and in the future.

In a 2011 Institute for Corporate Productivity (i4cp) survey, 76 percent of respondents reported that their organizations engage in some type of workforce planning to a high or very high extent. That’s an increase of 6 percent from a similar 2009 i4cp survey.

Because it centers on the human capital needed to carry out business objectives, workforce planning is a component of talent management. Further, it shares multiple similarities with other components typically included under the talent management umbrella, giving planning the potential to lend significant support to efforts to achieve better talent management integration and outcomes.

As growth continues in the implementation and evolution of workforce planning — and given companies’ ongoing imperative to maximize efficiency and productivity in all business functions — it will become increasingly important for talent managers to understand how planning fits into talent management programming and how they can best leverage that relationship.

The Right Place at the Right Time
Workforce planning is often described as ensuring the right people with the right skills are in the right place at the right time to meet an organization’s needs.

The i4cp survey defined it as encompassing “different components of human capital practices, including thoughtful and deliberate review of current and future workforce needs. It includes analytics, forecasting, planning and aligning human capital processes to meet business requirements.”

To carry out their mission, workforce planners may engage in a variety of activities, with each category encompassing multiple tasks. Overall categories of workplace planning activities identified by i4cp’s survey include:

• Reviewing the organization’s business strategy to determine implications about talent needs.
• Helping to build business strategy.
• Action planning to address priorities.
• Performing environmental scans to assess internal and external business conditions.
• Forecasting talent and skills demands.
• Forecasting talent and skills supplies.
• Assessing gaps in talent or skills.
• Creating scenarios to envision future business conditions.

The workforce planning process provides a framework for those activities, and many models have been created and touted by thought leaders in the field. For example, Texas-based energy company Luminant developed a streamlined, five-step process for its planning function (Figure 1).

Shannon Vallina, Luminant’s director of strategic workforce planning, said workforce planning begins with a definition of the business model and then identifies pivotal roles — jobs that directly affect the organization’s success. Once those roles are identified, talent demand and supply forecasts spotlight areas at risk for crucial talent shortages. Then talent managers can take action to build or enhance the talent pipelines associated with at-risk positions.

The final step in the Luminant planning process applies metrics to determine whether talent risk mitigation efforts are successful. “We want to eliminate the risk of negative business impact if someone should leave a role unexpectedly,” Vallina said. “Wherever there is a pivotal role, we want to have the bench strength needed to replace someone immediately.”

The Components of Talent Management
Talent management aims to ensure that an organization acquires, retains and develops the people it needs with the skills they need to execute business strategies. While its objectives sound similar to those in workforce planning, there are important distinctions.

Talent management describes an overarching effort that includes workforce planning among many component functions. Further, it focuses on people — recruiting them, engaging them, developing them, maximizing their capabilities and performance, and retaining them.

In contrast, workforce planning centers on the roles that are important to an organization, not the employees in those roles.

Accomplishing talent management requires leaders to integrate a number of disparate organizational functions, orchestrating their interaction and interdependence. Within that synthesis of functions is the junction of workforce planning and talent management.

Research by i4cp and the American Society for Training & Development identifies 19 components that comprise talent management:
• Performance management.
• Learning/training.
• Leadership development.
• High-potential employee development.
• Recruitment.
• Engagement.
• Compensation and rewards.
• Succession planning.
• Retention.
• Organizational development.
• Assessment.
• Competency management.
• Team development.
• Career planning.
• Critical job identification.
• Integrated HR management systems.
• Workforce planning.
• Diversity initiatives.
• Acquisition of outsourced or contract talent.

The Crossroads
Luminant’s workforce planning process — and similar models — illustrate multiple potential intersections between workforce planning activities and components of talent management.
Succession planning is an obvious factor, especially in Luminant’s case, since the company’s efforts are aimed at building robust pipelines to ensure a steady stream of talent for pivotal roles. In turn, such an effort requires appropriate learning programs, along with leadership development efforts for management positions, to prepare candidates for succession.

Opportunities to develop high-potential employees become apparent as workforce planning’s output makes talent needs clear. Ongoing performance management and career planning activities help direct talent appropriately and support development of needed skills and capabilities.

Diversity initiatives also help to identify and channel a range of talent into pipelines. Then, workforce planning spotlights potential career paths for engaged and promising employees who might want to or be capable of building long and productive careers within the organization.

Talent acquisition provides another workforce planning and talent management junction. For instance, Luminant has created its own Luminant Academy in east Texas. The program provides scholarships to high school students and takes them through a company-developed curriculum using simulations and other types of training to prepare students for future employment.

Vallina said workforce planning outcomes help to provide “a more laser-like focus” for academy programming, while at the same time adding similarities between workforce planning, learning and recruitment functions.

Intend to Integrate
Strengthening the interconnectedness of its people-related functions underlies new talent efforts at Toyota Financial Services, a provider of finance and insurance products to Toyota and Lexus dealers and customers across the U.S.

Michael LeBrun, who manages workforce planning and analysis for the company, offered two recent examples of how the company is starting to integrate workforce planning and talent management.

First, a focus on integrated talent management strategy (ITM) is built on what LeBrun called “a deliberate intent to provide cohesive solutions to the business by getting all HR areas to connect horizontally, rather than vertically. With ITM, our HR professionals start to consciously and constantly integrate their functions’ approaches and activities with those in other areas of talent management, keeping in mind what the outcomes will be for the business.”

Second, the firm’s workforce planning — specifically, its workforce segmentation activities — have helped drive ITM. “We pulled together a cross-functional HR team to develop our initial workforce segments,” LeBrun said.

Team members represent organizational development, talent acquisition, compensation, workforce planning and the company’s HR consultants, a designation similar to business partners. The cross-functional nature of the group offered an opportunity to identify other integration points. For instance, a team member from talent acquisition immediately recognized that segmentation analysis could direct recruitment strategies. An organizational development staffer saw how segmentation could help her function facilitate and focus succession planning discussions.

LeBrun said these kinds of realizations changed the way he and other leaders think about the workforce. Further, the HR team recognized that integration is key to deliver cohesive solutions to the business. “It’s a big part of why the connection between workforce planning and talent management is beginning to happen here. And it’s why we believe it will build momentum and overcome challenges. The ITM initiative is a deliberate choice. We are committed to making integration happen.”

The fact that Luminant, Toyota Financial Services and many other organizations are using the connections between workforce planning and talent management highlights some relevant points for other companies considering how to begin their own integration journeys.

Communication is important. At Luminant, Vallina said a back and forth dialogue in workforce planning role segmentation meetings with business unit leaders was helpful in getting everyone on the same page.

“The talent decisions we make based on the guidance and recommendations from workforce planning will help the organization build the workforce it needs to remain competitive and ensure the company has the capability to execute on its strategy,” LeBrun said of Toyota.

For Toyota Financial Services — or any company — to fully realize the strategic benefits workforce planning can offer, effective communication must take place on an ongoing basis. LeBrun said his team regularly provides workforce analysis and insight to senior management, HR leaders and others.

LeBrun also explained the importance of informal interactions as a vehicle to challenge talent leaders to look for employees or areas where integration might be beneficial. He said he initiates conversations about integration with colleagues in other functional areas and looks for talent functions to involve in workforce planning. “I think this broader inclusion is helping our integration efforts, but it also drives accountability,” he said.

Creating frameworks or other tools that help employees visualize or understand the relationship between workforce planning and talent management can help companies in their efforts to achieve better integration. For example, Luminant’s workforce planning team developed a survey tool for use in segmenting roles. Its implementation helped facilitate communication about talent issues while also supporting identification of talent-related risk and prioritization of succession planning activities.

As workforce planning continues to evolve, planners, recruiters, learning professionals and others involved in talent management can apply their skills to share information and to facilitate the kind of broader inclusion that leads to better overall talent management integration and, ultimately, better organizational performance.

Carol Morrison is a senior research analyst for the Institute for Corporate Productivity. She can be reached at