Take Your Workforce Planning to the Next Level

Agenda

Relationship between Talent Management & WFP

What is WFP

A recent study from Bersin/TNG

Building a WFP model ground up

WFP Capability & Ownership

WFP Maturity model

Technology Landscape

Tips for Implementation

What is Driving The Need For Talent Management? Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. Agriculture Age Industrial Age Knowledge Age Talent Age

Talent: a critical component of the Business Strategy

Aligning Talent Management With Business Strategy Results from Answering and Resolving Fundamental Questions:

How does our business strategy influence our current and future workforce?

What skills do we need to drive our strategy?

How do we transform our workforce and what changes to HR delivery systems, policies and procedures need to occur?

How do we compete more effectively for external talent in the midst of a skills and labor shortage?

How do we engage and develop our workforce in alignment with our business strategy?

Do we have effective system enablement and integration that allows us to quantify the resulting impacts to our business strategy?

Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. BUSINESS STRATEGY Operations Financial Sales & Marketing Talent Right People at the Right Time in the Right Role At the Most Economical Cost

Components of Talent Management Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. INTEGRATED TALENT MANAGEMENT Performance Management Workforce Planning Talent Acquisition Organization Design Succession Planning Compensation Planning Learning & Development Competency Management System Enablement Strategy Process DNA Scalability

The Vision of integrated TM driven by WFP

Talent Strategy and Planning as derived from your WFP

Silos execute processes in accordance with strategy

Coordination between functions, inputs and outputs

HR Systems must communicate

Competency management is the common language

All HR functions operating in alignment with the business strategy

What is Workforce Planning? Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. Workforce Planning is the process that provides strategic direction to talent management activities to ensure an organization has the right people in the right place at the right time and at the right price to execute its business strategy

Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. The Newman Group recently partnered with Bersin & Associates to survey what the Workforce Planning Landscape looks like today

Workforce Planning in Crisis Mode

67% of companies conduct workforce planning on an “as needed” basis…

Relocation

Mergers and acquisitions

Change in leadership

Change in company strategy

Global expansion

Diversifying the workforce

Key Findings in Workforce Planning

The majority of organizations are ineffectual at predicting future talent demands.

Workforce planning fails when it is viewed as an HR issue rather than a business issue.

The industries most heavily impacted by aging talent are also the same industries placing a heavy priority on strategic workforce planning.

Strategic workforce planning will not happen overnight

Key Findings in Workforce Planning

Organizations need a more consistent approach to workforce planning.

Understanding talent gaps is imperative to the success of a workforce planning process.

Recruiting and staffing currently play a small role in workforce planning .

Technology can improve the workforce planning process for any company at any level of maturity in workforce planning.

Why is it so hard to get WFP off the ground?

Because it comes at you from the top down

But you need to build from the ground up

Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. Breaking it all down… As with building any house… you first need to visualize and agree upon the schematic

Building the foundation ~ Data

Requires you to build processes that stabilize the data

Integrate & normalize data from various platforms

Ensure you are gathering the right level of information that will translate into ‘intelligence’

Utilize any company/industry benchmark data to help you set KPI’s

Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. Mining Internal & External Data Basement Level Internal data warehouses or systems such as: HRMS, Financial Systems, ATS, LMS, etc. Environmental Trends such as: Competition, Labor supply, demographics, etc.

Ensuring a Consistent Process Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. WFP Objective Forecast Demand Evaluate Supply Analyze Gaps Manage Gaps Consistent Workforce Planning Methodology Level 1 TM Strategy

Focusing on the most critical versus boiling the ocean Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. Target Critical Talent Sets Leadership Roles Bench Roles Functional Expertise Industry Expertise Upper Levels

Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. WFP Objective Forecast Demand Evaluate Supply Analyze Gaps Manage Gaps Business Strategy Consistent Workforce Planning Methodology Mining Internal & External Data Operational Effectiveness Target Critical Talent Sets Operational & Strategy Drivers Business Strategy and Operating Model Level 1 Basement Level Upper Levels Window Views Strategic Planning Lens: 18+ months TM Strategy Internal data warehouses or systems such as: HRMS, Financial Systems, ATS, LMS, etc. Environmental Trends such as: Competition, Labor supply, demographics, etc. Operational Lens: Typically annual Environmental Influences Copyright © 2009. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. Workforce Planning Drives Talent Management Leadership Roles Bench Roles Functional Expertise Industry Expertise Knowledge Transfer Age/ Retirement Analysis Retention Management Capability Management Mergers & Acquisitions Headcount Forecasting Diversity Strategy Restructure or Expansion

Does HR Have the Right Capabilities? Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. “ The biggest risk is that you get a model maker, rather than someone who can genuinely add value to the business.” --Recent quote from a senior business leader Source: Corporate Leadership Council 2009

You don’t have to make everyone in HR an expert at WFP Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. HR Business Partners Shared Services Work as strategic partners with the business utilizing Talent Intelligence to drive their business strategies Focus on the transactional WFP tasks such as standard reporting and providing meaningful information through ad-hoc reporting Workforce Planning COE Specializes in Turning Talent Information into Talent Intelligence COE Framework Talent Management based on Applied Intelligence Strategy Brand Structure Process Technology

Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. That’s fine, but still seems like a lot for anyone to accomplish. What are the various levels of workforce planning and tools being used?

Workforce Planning Maturity Model Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. Business Plan & Headcount Data Traditional WFP Situational WFP Business Plan & Headcount Data Data Relationships Business Plan & Headcount Data Data Relationships Business Strategy Workforce Analytics Scenario Modeling Strategic Workforce Planning Increased levels of WFP complexity Workforce Segmentation Increased data points for analysis Basic Intermediate Advanced

Basic: Traditional WFP Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. Business Plan & Headcount Data Traditional WFP The most commonly used workforce planning process is a traditional approach focused primarily on headcount trending. Through the analysis of current vs. forecasted headcount, a company is able to determine it’s talent gaps against the budgeted headcount in the business plan Basic

Basic: Situational WFP Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. Business Plan & Headcount Data Situational WFP Situational workforce planning is a basic model that is similar to the Traditional workforce planning in that it analyzes the variances between actual vs. needed headcount. However, this model is used as a one-time approach to address a specific business challenge (e.g. merging companies, relocating an office) Basic

Intermediate: Workforce Analytics Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. Business Plan & Headcount Data Data Relationships Workforce Analytics Workforce Analytics moves the Workforce Planning model to an intermediate level by engaging in heavier quantitative data analysis. This approach goes beyond headcount analysis to example relationships between key data variables such as; employee demographics, cost, turnover, performance, etc. Intermediate

Ordinary Metrics & Measures with WFP Lens

Turnover

Typically we look at Voluntary vs. Involuntary

Focus is on reducing voluntary

Performance Ranking

Typically 5 point rating scale

Often a forced distribution

By looking at turnover data by performance category, you can create a Retention Index

Comparing the average turnover rate to the rate of turnover within a specific category

Retention Index Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. Talent Leak Formula: Ave Turnover % – Ave Turnover % in Demographic = Retention Index Performance Category Performance Rank All Far Exceeds Exceeds Meets Needs to Improve Does not meet # Employees 6500 300 1300 3500 1000 400 Total Turnover 1625 75 450 600 200 300 Turnover % 25% 25% 35% 17% 20% 75% Retention Index 0% -10% 8% 5% -50%

Retention Index Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. Talent Leak Formula: Ave Turnover % – Ave Turnover % in Demographic = Retention Index Employee Tenure Tenure All More than 15 11-15 years 5-10 years 1-4 years Less than 1 year # Employees 6500 300 1300 3500 1000 400 Total Turnover 1625 25 200 700 550 150 Turnover % 25% 8% 15% 20% 55% 38% Retention Index 17% 10% 5% -30% -13%

Intermediate: Scenario Modeling Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. Business Plan & Headcount Data Data Relationships Scenario Modeling Scenario Modeling also utilizes a heavier quantitative approach found in Workforce analytics. However, the difference here is in layering in qualitative ‘what if’ situations that test data relationships and make projections that are more accurate and fine-tuned. Intermediate

Scenario Modeling Example Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. Current Workforce Plan Industry Trends Political Developments Labor Changes New Business Strategies Future Workforce Plan Impact Business Plan & Headcount Data Business Plan & Headcount Data ‘ What if’ situations that could impact the workforce plan

Example: Company Divestiture Scenario Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. What if? Chime North Phone company divested it’s Home Phone and Mobile Phone Call Center Departments.

Advanced: Strategic Workforce Planning Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. Business Plan & Headcount Data Data Relationships Business Strategy Strategic Workforce Planning Strategic Workforce Planning is the most advanced approach because it is more integrated into the organization’s business and financial planning processes. This enables organizations to have a talent plan that is aligned with the business strategy, thus guiding more informed business decisions. Advanced

Sample Leader Insight Meeting Questionnaire Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. SPU Leader Insight Meeting What are your greatest workforce risks/concerns? What are your expectations from a workforce plan? How would you define the success of a workforce plan? What talent information do you need to make strategic decisions? Who are the key stakeholders in your area we need to speak with? What financial information do you need to make strategic decisions? Is the information you need readily available to you? Validation of talent data What is the average spend (by discipline) in your workforce? Do you feel the average spend by discipline is a strength/concern? Do you have the right talent mix? (FTE, Contract, ExPats, Nationals)? Is this role difficult to source in the marketplace? What roles are essential to managing the contract spend for your area? What roles are essential to managing the contract spend for your area? What are your training needs talent effectiveness? (internal, external) Individual action plans for each SPU to close the gap Build Development for internal talent movement Buy Acquire talent externally Borrow Augment headcount with contract or temporary labor Bounce Planned attrition

Workforce Segmentation Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. Workforce Segmentation Workforce Segmentation is taking the larger Workforce Plan and breaking it down into components (segments, job families) that have more strategic importance. This allows organizations to analyze the dynamics, needs and motivations of the critical roles, thus investing their resources more strategically.

Workforce Segmentation Example Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. Source: The Conference Board “Strategic Workforce Planning, Forecasting Human Capital Needs to Execute Business Strategy”; via Corning Incorporated Build Protect Streamline/ Outsource Redirect Roles that affect the strategy Roles affected by the strategy Strategic Critical to driving long-term competitive advantage, with specialized skills or knowledge Core The “Engine of the Enterprise,” unique to the company and core to delivering on its products and/or services Requisite Cannot do without, but whose value could be delivered through alternative staffing strategies (e.g. off-shoring, outsourcing, replace w/technology) Non-Core Talent whose skill sets no longer align with the company’s strategic direction Increased investment Potential Strategic Action Talent Segment and Value

Technology Solutions Landscape Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. ERP Pure Plays ATS LMS Analytics Emerging Players Performance Management In House Solutions Example Providers

Tips for implementation Copyright © 2008. Korn/Ferry International and Korn/Ferry International Futurestep, Inc. All Rights Reserved. Identify the Business case & Sponsors for WFP Identify Core Planning Team Define Success Measures Engage Stakeholders for Qualitative and Quantitative inputs Pilot the WFP efforts in smaller divisions to tweak as needed Workforce Planning Workshops

General Q&A