Strategic Workforce Planning: Key Principles and Objectives, Paul Turner

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Making sure that we have the right people in the right place with the right level of skills at the right time to deliver both short and long term objectives requires information and insight. This need has sparked a growing interest in workforce planning. Organisations have identified a compelling need to be able to ‘shape’ and skill themselves to deal with both expected and unexpected events: as well as to control costs without damaging competitiveness. Strategic Workforce Planning (SWP) supports these objectives in the quest to become flexible and agile. SWP is a core process of human resource management. It helps HR Professionals to provide insight to an organisation’s competitive advantage through people. This session will cover some of the objectives, principles and models used in SWP, together with case studies of best practice.

This presentation was used at HR Summit and Expo 2013 www.hrsummitexpo.com

Published in: Business, Technology

Strategic Workforce Planning: Key Principles and Objectives, Paul Turner

  1. 1. DI³ Data Information Intelligence Insight Strategic Workforce Planning ‘A core process of human resource management’ Paul Turner
  2. 2. DI³ Data Information Intelligence Insight Professor Paul Turner Workforce planning- right people, right time, right skills Paul Turner has held Professorial positions at Universities in Birmingham, Nottingham and Cambridge. Paul Turner’s previous positions have included President of Europe, Middle East and Africa, Employee Care for the Convergys Corporation of Cincinnati, (to 2005) Group HR Business Director for Lloyds TSB, (to 2003) Vice President of the CIPD, (to 2001) a Director of BT, a Non-Executive Director of Blessing White and OPI and a General Manager for Plessey in both the UK and Asia Pacific. Paul was Chair of the European Human Asset Conferences from 2009 to 2012 and Chair of the European Talent for Tomorrow Conferences. He was a judge on the European HR Excellence Awards, the CIPD People Management Awards and a consultant on the CIPD research into Workforce Planning (2010) and Talent Management (2007). Paul has spoken at business conferences around the world and is the author or co author of Meaning at Work- Employee Engagement in Europe (2012),Talent Management in Europe (2012), Workforce Planning (2010), The Admirable Company (2008), Talent (2007), Organisational Communication (2003) and HR Forecasting and Planning (2002). He has written articles for business journals and the International Press. Paul has a first degree from the University of East Anglia, a Ph.D from the University of Sheffield and is a Companion of the CIPD. 2
  3. 3. DI³ Data Information Intelligence Insight DI³ ‘From manpower planning to capacity planning why we need workforce planning.’ Information Insight 2000-2005 2013+ Data Intelligence 1960-2000 • How will the workforce plan contribute to strategy • What kind of people do we need to deliver competitive advantage • Should we buy or build? 2005-2013 DI³-from data to insight 3
  4. 4. DI³ Data Information Intelligence Insight Insight 4
  5. 5. DI³ Data Information Intelligence Insight Insight An accurate and deep intuitive understanding 5
  6. 6. DI³ Data Information Intelligence Insight Data Information Intelligence Insight Strategic Workforce Planning has evolvedour organisations need more than data. They need insight about their people to be competitive in world markets. This is because people are often the only source of competitive advantage 6
  7. 7. DI³ Data Information Intelligence Insight Data Information Intelligence Insight HR Professionals provide insight through being strategic positioners, capability builders, change champions, innovators and integrators. We do this on the back of an evidence based approach to people management. SWP helps us to look for connections and solutions. What does this mean in practice? 7
  8. 8. DI³ Data Information Intelligence Insight Data Information Intelligence Insight Strategic workforce planning allows us to move from data to statistics to analytics and then add an extra ingredient People Statistics Collecting data Analysis of core HR activity HR Planning Linking human capital investment to business results Operational planning- skill based routing etc. HR Forecasting Gap analysis HR Analytics Human Capital Analytics Predictive modelling ROI and performance profiling Strategic Workforce Planning 8
  9. 9. DI³ Data Information Intelligence Insight Data Information Intelligence Insight Today we will look at three important questions: 1.What is strategic workforce planning 2.How does it contribute to the organisation’s success 3.What is the role of HR professionals in SWP? 9
  10. 10. DI³ Data Information Intelligence Insight Strategic Workforce Planning Interpretations and definitions 10
  11. 11. DI³ Data Information Intelligence Insight And so consistent definitions were developed CIPD definition- ‘A core process of human resource management that is shaped by the organisational strategy and ensures the right number of people with the right skills, in the right place at the right time to deliver short- and long-term organisation objectives.’ SHRM working definition- ‘An ongoing process to identify the workforce needs for the future. Identification of the gap between demand and supply for staff – workforce numbers, job roles and skills – and the resultant degree of business risk. A critical part of corporate planning and a driver for high impact HR strategy. A PLAN to inform business decision-making (action and accountability)’ 11
  12. 12. DI³ Data Information Intelligence Insight Why should we bother to do Strategic Workforce Planning? 12
  13. 13. DI³ Data Information Intelligence Insight Objectives of Strategic Workforce Planning- 1 • To make sure we have the right people in the right place at the right time with the right skills; predicting future talent demands • To ensure that the demand for people numbers, knowledge, skills, attitudes, and values are matched with the supply of these attributes • To align and integrate people strategies with organisational strategies 13
  14. 14. DI³ Data Information Intelligence Insight Objectives of Strategic Workforce Planning- 2 • To ensure that an organisation takes account of people as contributors to its success by recognising their unique contribution to strategic direction and performance- workforce planning is a business issue • To provide a process by which people considerations are raised early in the strategy-setting debate and to ensure that business-based plans are put in place for the people outcomes of this debate 14
  15. 15. DI³ Data Information Intelligence Insight But there are other considerations in the post recession environment 15
  16. 16. DI³ Data Information Intelligence Insight From data to insight- important trends in Strategic Workforce Planning 1. Strategic and flexible 2. The Rise of Big Data 3. Predictive Modelling 4. The Generational Mix 5. Talent Shortages 6. Organisation design 7. Business Strategy 16
  17. 17. DI³ Data Information Intelligence Insight 1. Strategic and flexible SWP is growing in importance. But why bother to plan when the world is so unpredictable? • A compelling need to be able to shape the organization to deal with both expected and unexpected events • The need to control costs without damaging competitiveness • The need to up-skill organizations • The growing influence of the HR function Source: Paul Turner, ‘From manpower planning to capacity building – why we need workforce planning’ CIPD 2010 17
  18. 18. DI³ Data Information Intelligence Insight 2. The Rise of Big Data Why all of the attention on Big Data? A recent CIPD report noted that Big data could help to: • • • • • Find out who’s likely to leave and how to keep them Understand why your staff are underperforming Know where employees should be and why Identify whether remote working is effective Show the holes in your recruitment process There was an information revolution taking place in which patterns and insights is something for all business functions- including HR 18
  19. 19. DI³ Data Information Intelligence Insight 2. The Rise of Big Data- but what is it and why is it ‘big?’ Big data spans four dimensions: Volume, Velocity, Variety, and Veracity. There are five broad ways in which using big data can create value: • big data can unlock significant value by making information transparent and usable • as organizations create and store more transactional data in digital form, they can collect more accurate and detailed performance information • big data allows ever-narrower segmentation of customers and therefore much more precisely tailored products or services • sophisticated analytics can substantially improve decision-making • Big data can be used to improve the development of the next generation of products and services. 19
  20. 20. DI³ Data Information Intelligence Insight 2. The Rise of Big Data (continued) Big Data’s greatest HR value may well be as a predictive tool. • Analyzing the skills and attributes of high performers, Big Data allows organizations to build a template for future hires. HR and Leaders can learn what to look for with incredible precision. • Big Data is democratic, supporting a meritocracy and enabling companies to make smarter decisions; Google has an entire HR division devoted to “people analytics” which measures qualities such as social skills, flexibility, emotional intelligence, initiative, attitude (negative or positive or AKA “good fit” vs “bad fit”), and perseverance. • Big Data is a great people detective. It’s unbiased and discovers talent. The right algorithms can pinpoint hidden potential by harvesting and then filtering reams of information to deliver a star in the making. 20
  21. 21. DI³ Data Information Intelligence Insight 3. The Growth of Predictive Modelling Four levels of HR analytical capability: Level 1 is producing ad hoc metrics and reports that tell “what happened.” Workforce planning- right people, right time, right skills Level 2. Descriptive benchmarking and dashboards, which get at “what happened, and how do we compare with others on a defined set of metrics?” Level 3. Advanced survey analytics, which is about “why did it happen, and how/where can we improve?” Level 4 is creating predictive solutions, or “what is likely to happen, and how can we be better prepared?” In a 2012 study of 383 organisation 12% said they had reached Level 3. 21
  22. 22. DI³ Data Information Intelligence Insight Baby boomers • Born 1945 - 1964 • Shaped by: less trust in government Demographics and workforce planning Generation X • Born 1965 - 1980 • Shaped by: Internet, Generation Alpha • Born 2010-2024 • Largest generation due to the birth spike • Most formally educated • Even more tech savvy than Generation Z diversity, unemployment, parental divorce rates 4. The Generational Mix Generation Y Generation Z • Born 1995-2009 • Tech savvy • Strong work ethic • Born after 1980 • Shaped by: information overflow, overzealous parents, globalisation
  23. 23. DI³ Data Information Intelligence Insight 5. Talent shortages create real challenges for organisations in 2013- impact on the workforce plan? The coming talent shortage took centre stage at the annual WEF conference in Davos (2011) and the issue also has quickly become a priority among federal governments, federal agencies, nongovernmental organizations (NGOs), educational institutions, and community-based organizations (CBOs) as well as corporations. 23
  24. 24. DI³ Data Information Intelligence Insight 5. Talent shortages create real challenges for organisations- Hay Group Study 24
  25. 25. DI³ Data Information Intelligence Insight 6. Organisation design- from Hierarchy to Networkhow does this impact on the workforce plan? From Hierarchy to Network 25
  26. 26. DI³ Data Information Intelligence Insight 7. Business Strategy- approach to competitive advantage- how can workforce planning contribute to both viewpoints? Source Huselid, SHRM, 2009 26
  27. 27. DI³ Data Information Intelligence Insight Workforce planning- right people, right time, right skills ‘HR needs to move beyond the present and the purely informational into the predictive and insightful. This is the essence of a genuine paradigm shift in the way HR functions create value and how they are beginning to view their role in collecting, connecting and sharing data that will influence decisions about the future direction of the business. ‘ KPMG 27
  28. 28. DI³ Data Information Intelligence Insight Insight, HR professionals and strategic workforce planning Next Generation HR Ulrich 1997 Ulrich 2013 Process Strategic Partner Capability builder Administrative expert Strategy Operations Change Agent Strategic positioner HR innovator and integrator Change champion Employee Champion Technology proponent People Credible Activist HR has a critical role in providing insight to enhance the organisation’s competitive position and capability 28
  29. 29. DI³ Data Information Intelligence Insight Next Generation HR-But what do we mean by insight? CIPD 2010 What are our organisational and people strengths? Organisational Insight What is the context within which our business is operating and how does this affect our people strategy? Context Insight What is the nature of our company’s competitive advantage? What is the role of our people in delivering this? Business Insight 29
  30. 30. DI³ Data Information Intelligence Insight Insight, HR professionals in strategic workforce planning Putting the 3 perspectives together reveals a powerful new image Strategic Partner Administrative expert Change Agent Employee Champion Capability builder Strategic positioner HR innovator and integrator Change champion Technology proponent Organisational Insight Context Insight Business Insight 30
  31. 31. DI³ Data Information Intelligence Insight Workforce By adding insight to HR analytics we are able to address the fundamentals of planning- right The people strategy and management. Strategicpeople, right Workforce Plan is fundamental to achieving competitive advantage time, right skills through people 31
  32. 32. DI³ Data Information Intelligence Insight What are the key stages in Strategic Workforce Planning? 32
  33. 33. DI³ Data Information Intelligence Insight A standard workforce planning process Market Analysis Financial Analysis Strategic Workforce Plan Business Objectives Business Strategy Forecast Demand Environmental Scan (people and resources) People Strategy to achieve SWP Forecast Supply Scenario Planning Gap Analysis Implementation and operationalising of the strategic workforce plan Source, Paul Turner Measures of effectiveness Recruitment and retention Leadership, Talent Reward and Engagement Strategic Review and Feedback to the Board
  34. 34. DI³ Data Information Intelligence Insight Gap Analysis 34
  35. 35. DI³ Data Information Intelligence Insight A standard workforce planning process –gap analysis Gap Analysis There is a shortfall in supply of people needed to deliver the business strategy There are gaps in: Our people strategy therefore needs to allocate resources to: Leadership and managerial roles Talent management Technical Skills Technical recruitment and training Shortages in some geographies Employer branding in new geographical areas Workforce analytics Source, Paul Turner, 2002
  36. 36. DI³ Data Information Intelligence Insight A standard workforce planning process –gap analysis headcount 7000 6000 demand 5000 gap Turnover Retirements Skills change New business 4000 3000 supply 2000 1000 year 1 2 3 4 5 6 7
  37. 37. DI³ Data Information Intelligence Insight A standard workforce planning process –filling the gap headcount 7000 6000 demand gap Recruitment 5000 4000 3000 Training supply Reward 2000 1000 year 1 2 3 4 5 6 7
  38. 38. DI³ Data Information Intelligence Insight Scenario Planning possible future events that might affect the organisation, and the development of alternative actions and plans to prepare 38
  39. 39. DI³ Data Information Intelligence Insight A standard workforce planning process- scenario planning Business strategy Scenario Planning Scenario 2: 1. The external labour market fails to supply enough people with the right skills to fulfil projected headcount 2. Costs of labour exceed initial forecast 3. Shortfall in leadership skills 4. Failure to engage workforce to new strategy What are the Strategic Workforce Planning implications? External Environmental Analysis Scenario 1: 1. Our business achieves its target 2. Exceeds it by 20% 3. Exceeds it by 50% 4. Falls short of its objectives What are the Strategic Workforce Planning implications? Strategic Workforce Plan
  40. 40. DI³ Data Information Intelligence Insight A standard workforce planning process- scenario planning Scenario Planning What if: Our business achieves its target Exceeds it by 20% Exceeds it by 50% Falls short of its objectives Source, Paul Turner We test some scenarios and look for the implications on people management (McKinsey advocate at least four scenarios) What are the options: Have a flexible workforce with new kinds of contract Have a supply of subcontractors Over recruit and redeploy
  41. 41. DI³ Data Information Intelligence Insight What can organisations do to make sure they have good workforce information? 41
  42. 42. DI³ Data Information Intelligence Insight Information used in strategic workforce planning Source CIPD 2010 42
  43. 43. DI³ Data Information Intelligence Insight What can organisations do to make sure they convert information to intelligence? 43
  44. 44. DI³ Example of Business insights and results from workforce planning Data Information Intelligence Insight Business Insights Results Workforce Planning 1. Resource Needs (Current & Forecasted) 2. Workforce Related Actions Avoid workforce capacity shortfalls Acquisition & Movement 1. Effectiveness of Recruiting Efforts 2. Workforce Migration Reduce cost of sourcing workforce Workforce Performance 1. Effective Use of Top Performers 2. Impact to Retention 3. Effective Management Structure Demographics & Diversity Learning & Development Retention Creation of effective management structures 1. Effectiveness of Diversity Programs 2. Early Identification of Gaps in Diversity Early identification of gaps in diversity 1. Effectiveness of Development Programs 2. Alignment of Progression to Development Develop a competitive workforce 1. Turnover Issues 2. Loss of Development Investments Source; Jonathan Ferrar, IBM, Human Asset 2011, Budapest Measure “churn” 44
  45. 45. DI³ Data Information Intelligence Insight How can HR professionals provide insight in the strategic workforce planning process? What does this mean? 45
  46. 46. DI³ Data. Information. Intelligence. Insight DI³ Data Information Intelligence Insight Data Quantitative Information about the workforceNumbers employed and where; Grades, Demographics . Insight How do our people contribute to competitive advantage? What does the strategic workforce plan tell us about current and future make up of the workforce? How can we ensure that the workforce is aligned with today’s and tomorrow’s business strategy? Information DI³ Internal-turnover, absence data, demographics, working patterns, succession planning, talent planning, competence levels achieved, skills External- labour markets Intelligence Internal- Workforce knowledge and skills fit with business strategy Cultural fit Change management External- demographic trends Predictive modelling 46
  47. 47. DI³ Data Information Intelligence Insight What are the key challenges in strategic workforce planning? What can we do about them? 47
  48. 48. DI³ Data Information Intelligence Insight Challenges and enablers of workforce planning (CIPD ) challenges enablers •Lack of clarity or focus in the organisation strategy •A ‘triangle’ of conversation about future requirements between the business, HR and finance •A constantly shifting strategy •Workforce champions in the business •Too much focus on the operational and budgetary planning at expense of longer-term planning or a strategic direction for planning •Having a good process that enables everyone to feed in information and is informed by the needs of the business •Processes that don’t join up, meaning information is not fed into the planning cycle or that effort is duplicated •HR and the line working together to understand future people needs •Failure to develop plans that are responsive enough to adapt to a changing environment •Understanding the difference between supply and demand for labour •Failure to review plans in the light of new information that indicates change •Bottom–up communication feeding the planning process •Poor-quality data/systems •Good-quality data that people can believe, accompanied by adequate analysis to explain what it means for the business; predictive modelling •Too much focus on the numbers of people required and not enough on capacity and potential to develop new skills and abilities in the future •Leaders acting on the data to make informed decisions •An overcomplicated system or trying to do too much too soon •Regular planning cycle and reviews with feedback into the planning process •Lack of planning skills and good guidance on workforce planning •Developing managers’ workforce and resource planning skills 48
  49. 49. DI³ Data Information Intelligence Insight In summary- New Strategic Workforce Planning will: • be integrated with business strategy and planning • be used in short-term resourcing as well as longer-term planning • incorporate flexibility • and predictive modelling using data analytics 49
  50. 50. DI³ Data Information Intelligence Insight Strategic Workforce Planning ‘A core process of human resource management’ Paul Turner

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