Workforce Planning: A Good Practice or an Illusion?

It seems like the corporate would is abuzz with interest in workforce planning. Consultants are offering a variety of tools and programs on how to do workforce planning, and much of what is offered in excellent. The programs I have seen are logical, combine all the elements of what is generally considered good planning, and produce very comprehensive reports, plans and guidelines. The most thorough of these processes offers everything from tools to conduct competency analysis, assess gaps, prescribe development, do performance management to succession planning tools. Wow! I wish these had been around 20 years ago when I was in corporate HR. Yet, I wonder if we aren’t deluding ourselves and our management teams about what we can accomplish with these tools and process. Many of them are rooted in 20th century concepts about the labor market and about how candidates, especially Gen Xers, regard work and what they want from an employer. Many others, as well as I, have written about generational differences and the looming labor and skills shortages we will all face very soon. The only question mark in the labor shortage question is exactly when it will be felt in large scale. The tools I have seen take a long time to implement and learn. They assume a certain period of stability in your organization. After all, what good is a tool that measures competencies that are no longer in demand? What good are tools that indicate people are ready for development or promotion when they have already decided to leave? What organizations today need is a flexible and adaptive strategy for a constantly changing environment. A talent strategy that meets these requirements is complex and can only be done correctly when you have enlisted the cooperation of several parts of the organization: strategic planning, human resources, compensation, career development, training, succession planning and the finance group. There are four parts to such a talent strategy, which I will discuss below. Part 1: Create a forecast of demand. Knowing how many people you may need to supply is a vital first step in the planning process. While it is not possible or cost effective to try and get exact numbers given the constantly moving talent needs of most firms, you can easily define basic competency levels. There is always an amount of turnover that is predictable and there will always be some growth taking place. The finance and strategic or business planning groups can give you an idea of what growth is planned and then you can translate that into what kinds of people are going to be needed. If there are plans to open more branches, you know you will have to hire the usual people needed for these branches. By developing communication tools to keep you informed of changes, whether growth or downsizing, you can get a head start on finding the right kinds of people. These communications channels should be open all the time, and adjustments should be made in predicted needs at least quarterly. A standing committee charged with the talent strategy is one way to go about this as long as it is made up of people from a wide span of activities within the firm. Cleary, too, technology is critical to capture and disseminate changing skills needs. Another and more sophisticated part of this step is to see how much demand there is in the local market for the same kinds of people you will be after. Are your competitors seeking the same engineers you are? Frequently scanning your competitors’ job descriptions on their corporate websites and aggregating them into pictures of demand can give you unprecedented insight into the strategic direction of many firms. Developing this capability is invaluable for the prescient talent strategist. Part 2: Develop a deep knowledge of the supply of key talent. No one can know exactly how many people there are in a given profession, as the numbers are constantly changing and the definitions of most jobs keeps evolving. You can, though, build very accurate gauges of relative supply levels. By using the number of resumes found on job boards such as Monster.com and developing software that can sort them into categories, you can get a relative sense of how many of a particular profession are looking for work. If there are only a few resumes and you have need for many, you know that you will be faced with challenges. It may become necessary to discuss alternatives to hiring from outside, as salary expectations may exceed your organizations desire or ability to pay them. This is where the career development people should play their role. They should know what needs are forecast and estimate how many current employees could develop the needed skills and in what timeframe. This is what couples development tightly to business needs and proves training’s ROI. Firms that face consistent talent shortages in one or two areas should take a hard look at the cost of developing their own people to fill these positions. At the very least, you can advise management using actual data and let them decide whether to spend more on recruiting or on talent development. Talent development will become increasingly less expensive as the talent shortages grow. Another aspect of supply is to know who the best people are in a given field and in a given geography. For example, there are only a few hundred top-level CIOs in the United States. A recruiting organization with a talent strategy would know who those top few were, where they were, and have a sense of how likely they might be to relocate or move to another organization. Leading-edge firms have recruiting staff dedicated to this kind of competitive intelligence gathering. There are many high-tech positions where knowledge of who is who at other companies can be powerful in helping yours meet a critical need quickly. Part 3: Develop guidelines for hiring talent. Part 3 of the talent strategy is to develop guidelines and a methodology for deciding when and under what conditions you will hire or develop talent. The 20th-century approach was to always hire from the outside because talent was plentiful and not too expensive. As we know today, talent is no longer plentiful and will get scarcer over the next decade. Even in this slow period, skilled technical people are not finding it particularly difficult to find jobs. As we leave the slow economy in the next few months, we will see this shortage underlined. Organizations that have taken the time to assess their current workforce and that have a deep understanding of the current talent and its capabilities will be ready to deploy the best people wherever they are needed. This assessment could involve testing or competency analysis and should be linked to any succession planning process your firm may have. Knowing the current talent base is obviously necessary before you can decide on where the gaps are and how to fill them. Part 4. Develop tactics and execute a coordinated process. Once the data and assessments are complete, the 21st-century organization needs to approach the solution in a coordinated way. This means deciding how development will take place and whether a corporate university or an external provider can do this best. It means deciding on how many people to hire on a regular basis and how many on a part-time or contract basis while development of other staff takes place. No firm that I am aware of has this part of the process developed to any degree, yet it is becoming more important to get better at this. The strangest thing about all of this is that many firms have 98% of everything they need to create talent strategies; they just don’t put it all together. Maybe that’s the ultimate job of the 21st-century recruiter. So, rather than worry whether you should assess competencies with this tool or that, focus on the bigger picture and set about developing a talent strategy that will really be the flexible and useful tool they all promise to be yet rarely are.