Strategic Workforce Planning: Key Principles and Objectives, Paul Turner

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InformationIntelligence

Insight

Paul Turner

Strategic Workforce Planning‘A core process of human resource management’

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Workforceplanning- rightpeople, righttime, right skills

Professor Paul Turner

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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 theConvergys Corporation of Cincinnati, (to 2005) Group HR Business Director for Lloyds TSB, (to 2003) Vice President of theCIPD, (to 2001) a Director of BT, a Non-Executive Director of Blessing White and OPI and a General Manager for Plessey inboth the UK and Asia Pacific.

Paul was Chair of the European Human Asset Conferences from 2009 to 2012 and Chair of the European Talent forTomorrow Conferences. He was a judge on the European HR Excellence Awards, the CIPD People Management Awardsand 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- EmployeeEngagement 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 writtenarticles 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 ofthe CIPD.

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Data1960-2000

Information2000-2005

Intelligence2005-2013

• How will the workforce plancontribute to strategy

• What kind of people do weneed to deliver competitiveadvantage

• Should we buy or build?

Insight2013+

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DI³‘From manpower planning to capacity planning

why we need workforce planning.’

DI³-from data to insight

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InsightAn accurate and deep

intuitive understanding

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Data Information Intelligence InsightStrategic Workforce Planning has evolved-

our organisations need more than data. Theyneed insight about their people to be

competitive in world markets. This is becausepeople are often the only source of

competitive advantage

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HR Professionals provide insight through being strategicpositioners, capability builders, change champions,

innovators and integrators. We do this on the back of anevidence based approach to people management. SWP

helps us to look for connections and solutions.

What does this mean in practice?

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Data Information Intelligence InsightStrategic workforce planning allows us to move from data to

statistics to analytics and then add an extra ingredient

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People StatisticsCollecting dataAnalysis of coreHR activity

HR PlanningLinking human capital investmentto business resultsOperational planning- skill basedrouting etc.HR ForecastingGap analysis

HR AnalyticsHuman Capital AnalyticsPredictive modellingROI and performance profiling

Strategic Workforce Planning

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Data Information Intelligence InsightToday we will look at three important questions:

1.What is strategic workforce planning2.How does it contribute to the organisation’s

success3.What is the role of HR professionals in SWP?

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Strategic Workforce PlanningInterpretations and definitions

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And so consistent definitions were developed

CIPD definition- ‘A core process of human resource management that isshaped by the organisational strategy and ensures the right number of

people with the right skills, in the right place at the right time to delivershort- and long-term organisation objectives.’

SHRM working definition- ‘An ongoing process to identify the workforceneeds for the future. Identification of the gap between demand andsupply for staff – workforce numbers, job roles and skills – and the

resultant degree of business risk. A critical part of corporate planningand a driver for high impact HR strategy. A PLAN to inform business

decision-making (action and accountability)’

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Why should we bother to do StrategicWorkforce Planning?

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Objectives of Strategic Workforce Planning- 1

• To make sure we have the right people in the rightplace 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 withorganisational strategies

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Insight Objectives of Strategic Workforce Planning- 2

• To ensure that an organisation takes account ofpeople as contributors to its success by recognisingtheir unique contribution to strategic direction and

performance- workforce planning is a business issue

• To provide a process by which people considerationsare raised early in the strategy-setting debate and toensure that business-based plans are put in place for

the people outcomes of this debate

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But there are other considerations in thepost recession environment

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1. Strategic and flexible2. The Rise of Big Data3. Predictive Modelling4. The Generational Mix

5. Talent Shortages6. Organisation design

7. Business Strategy

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From data to insight- importanttrends in Strategic Workforce Planning

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1. Strategic and flexibleSWP 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 bothexpected 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

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Insight2. The Rise of Big Data

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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 andinsights is something for all business functions- including HR

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Insight2. The Rise of Big Data- but what is it and why is it ‘big?’

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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 collectmore accurate and detailed performance information

• big data allows ever-narrower segmentation of customers and therefore much moreprecisely 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 andservices.

Big data spans four dimensions: Volume, Velocity, Variety, and Veracity.

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Insight2. The Rise of Big Data (continued)

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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 tobuild a template for future hires. HR and Leaders can learn what to look for withincredible precision.

• Big Data is democratic, supporting a meritocracy and enabling companies to makesmarter 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”), andperseverance.

• Big Data is a great people detective. It’s unbiased and discovers talent. The rightalgorithms can pinpoint hidden potential by harvesting and then filtering reams ofinformation to deliver a star in the making.

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3. The Growth of Predictive Modelling

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Four levels of HR analytical capability:

Level 1 is producing ad hoc metrics and reports that tell“what happened.”

Level 2. Descriptive benchmarking and dashboards, whichget at “what happened, and how do we compare withothers on a defined set of metrics?”

Level 3. Advanced survey analytics, which is about “why didit happen, and how/where can we improve?”

Level 4 is creating predictive solutions, or “what is likely tohappen, and how can we be better prepared?”

In a 2012 study of 383 organisation 12% said they hadreached Level 3.

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Baby boomers• Born 1945 - 1964• Shaped by: less trust in

government

Generation X• Born 1965 - 1980• Shaped by: Internet,

diversity, unemployment,parental divorce rates

Generation Y• Born after 1980• Shaped by: information

overflow, overzealous parents,globalisation

Generation Z• Born 1995-2009• Tech savvy• Strong work ethic

Generation Alpha• Born 2010-2024• Largest generation due

to the birth spike• Most formally educated• Even more tech savvy

than Generation Z4. The

GenerationalMix

Demographics andworkforce planning

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The coming talent shortage took centre stage at the annual WEF conference in Davos (2011) and theissue 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.

5. Talent shortages create real challenges for organisations in2013- impact on the workforce plan?

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5. Talent shortages create real challenges for organisations- HayGroup Study

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6. Organisation design- from Hierarchy to Network-how does this impact on the workforce plan?

From Hierarchyto Network

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Insight7. Business Strategy- approach to competitive

advantage- how can workforce planning contribute toboth viewpoints?

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Source Huselid, SHRM, 2009

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‘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

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Insight, HR professionals and strategic workforce planningNext Generation HR

Ulrich 1997 Ulrich 2013

StrategicPartner

Administrativeexpert

Change Agent EmployeeChampion

People

OperationsStrategy

Process

Strategicpositioner

Changechampion

Technologyproponent

HR innovatorand

integrator

Capabilitybuilder

Credible Activist

HR has a critical role in providing insightto enhance the organisation’s competitive position and capability

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Next Generation HR-But what do we mean by insight?

OrganisationalInsight

Context Insight

Business Insight

CIPD 2010

What are ourorganisational and people

strengths?

What is the context withinwhich our business is

operating and how doesthis affect our people

strategy?

What is the nature of ourcompany’s competitiveadvantage? What is the

role of our people indelivering this?

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Insight, HR professionals in strategic workforce planningPutting the 3 perspectives together reveals a powerful

new image

StrategicPartner

Administrativeexpert

Change Agent EmployeeChampion

Strategicpositioner

Changechampion

Technologyproponent

HR innovatorand integrator

Capabilitybuilder

OrganisationalInsight

Context Insight

Business Insight

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By adding insight to HR analytics we areable to address the fundamentals of

people strategy and management. TheStrategic Workforce Plan is fundamental

to achieving competitive advantagethrough people

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What are the key stages in StrategicWorkforce Planning?

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Market AnalysisFinancial Analysis

Environmental Scan(people and resources)

Business Objectives Business Strategy

Strategic WorkforcePlan

Forecast DemandForecast Supply

Scenario PlanningGap Analysis

People Strategy toachieve SWP

Recruitment and retentionLeadership, Talent

Reward and Engagement

Implementation andoperationalising of the

strategic workforce plan

Measures ofeffectiveness

Strategic Review andFeedback to the Board

Source, Paul Turner

A standard workforce planning process

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Gap Analysis

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Gap Analysis There is a shortfall in supply of peopleneeded to deliver the business strategy

There are gaps in:Leadership and managerial roles

Technical SkillsShortages in some geographies

Our people strategy therefore needs toallocate resources to:Talent management

Technical recruitment and trainingEmployer branding in new geographical

areasWorkforce analytics

Source, Paul Turner, 2002

A standard workforce planning process –gap analysis

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A standard workforce planning process –gap analysis

headcount

7000

6000 demand

5000 TurnoverRetirementsSkills changeNew business

gap

4000

3000 supply

2000

1000year 1 2 3 4 5 6 7

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A standard workforce planning process –filling the gap

headcount

7000

6000 demandRecruitment

gap

5000

4000 Training

3000 supply Reward

2000

1000year 1 2 3 4 5 6 7

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Scenario Planningpossible future events that might affect the

organisation, and the development ofalternative actions and plans to prepare

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A standard workforce planning process- scenario planning

Business strategy

StrategicWorkforce

Plan

ExternalEnvironmental

Analysis

Scenario Planning

Scenario 1:1. Our business achieves its target2. Exceeds it by 20%3. Exceeds it by 50%4. Falls short of its objectives

What are the Strategic Workforce Planning implications?

Scenario 2:1. The external labour market fails to supply

enough people with the right skillsto fulfil projected headcount

2. Costs of labour exceed initial forecast3. Shortfall in leadership skills4. Failure to engage workforce to new

strategy

What are the Strategic Workforce Planningimplications?

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Scenario PlanningWe test some scenarios and look for

the implications on peoplemanagement (McKinsey advocate at

least four scenarios)

What if:Our business achieves its target

Exceeds it by 20%Exceeds it by 50%

Falls short of its objectives

What are the options:Have a flexible workforce with new

kinds of contractHave a supply of subcontractors

Over recruit and redeploy

Source, Paul Turner

A standard workforce planning process- scenario planning

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What can organisations do to make sure theyhave good workforce information?

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Information used in strategic workforce planning

Source CIPD 2010

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What can organisations do to make sure theyconvert information to intelligence?

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Example of Business insights and results from workforce planning

WorkforcePlanning

Learning &Development

Retention

Demographics& Diversity

Acquisition& Movement

WorkforcePerformance

Business Insights

1. Resource Needs (Current & Forecasted)2. Workforce Related Actions

1. Effective Use of Top Performers2. Impact to Retention3. Effective Management Structure

1. Effectiveness of Development Programs2. Alignment of Progression to Development

1. Effectiveness of Diversity Programs2. Early Identification of Gaps in Diversity

1. Effectiveness of Recruiting Efforts2. Workforce Migration

1. Turnover Issues2. Loss of Development Investments

Avoid workforcecapacity shortfalls

Develop acompetitive workforce

Measure “churn”

Early identification ofgaps in diversity

Reduce cost ofsourcing workforce

Creation of effectivemanagement structures

Results

44Source; Jonathan Ferrar, IBM, Human Asset2011, Budapest

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How can HR professionals provide insight in thestrategic workforce planning process?

What does this mean?

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InsightHow do our people contributeto competitive advantage?What does the strategicworkforce plan tell us aboutcurrent and future make up ofthe workforce?How can we ensure that theworkforce is aligned withtoday’s and tomorrow’sbusiness strategy?

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DataQuantitative Informationabout the workforce-Numbers employed andwhere; Grades,Demographics.

IntelligenceInternal- Workforceknowledge and skills fit withbusiness strategyCultural fitChange managementExternal- demographic trendsPredictive modelling

InformationInternal-turnover, absencedata, demographics,working patterns, successionplanning, talent planning,competence levels achieved,skillsExternal- labour markets

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What are the key challenges instrategic workforce planning?

What can we do about them?

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Insight challenges enablers

•Lack of clarity or focus in the organisation strategy

•A constantly shifting strategy

•Too much focus on the operational and budgetaryplanning at expense of longer-term planning or astrategic direction for planning

•Processes that don’t join up, meaning informationis not fed into the planning cycle or that effort isduplicated

•Failure to develop plans that are responsiveenough to adapt to a changing environment

•Failure to review plans in the light of newinformation that indicates change

•Poor-quality data/systems

•Too much focus on the numbers of people requiredand not enough on capacity and potential to developnew skills and abilities in the future

•An overcomplicated system or trying to do toomuch too soon

•Lack of planning skills and good guidance onworkforce planning

•A ‘triangle’ of conversation about futurerequirements between the business, HR and finance

•Workforce champions in the business

•Having a good process that enables everyone tofeed in information and is informed by the needs ofthe business

•HR and the line working together to understandfuture people needs

•Understanding the difference between supply anddemand for labour

•Bottom–up communication feeding the planningprocess

•Good-quality data that people can believe,accompanied by adequate analysis to explain whatit means for the business; predictive modelling

•Leaders acting on the data to make informeddecisions

•Regular planning cycle and reviews with feedbackinto the planning process

•Developing managers’ workforce and resourceplanning skills

Challenges and enablers of workforce planning (CIPD )

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Insight In summary- New Strategic Workforce Planning will:

• be integrated with business strategy andplanning

• be used in short-term resourcing as well aslonger-term planning

• incorporate flexibility

• and predictive modelling using data analytics

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Paul Turner

Strategic Workforce Planning‘A core process of human resource management’

Strategic Workforce Planning: Key Principles and Objectives, Paul Turner

Business

manpower planning

capacity planning

cipd people management

talent management

business conferences

european talent

kind of people

group hr business director