Workforce Planning Research: How To Strengthen Your Job In Today’s Economy

Jan 27, 2009
This article is part of a series called Polls.

In today’s tumultuous economy, companies have been forced to make some devastating workforce decisions. In an effort to prepare for the future, best-practice companies are taking a long-term strategic approach to attracting and retaining their employees. Makes sense, doesn’t it? Given the number of massive layoffs, companies are looking to restructure their organization, streamline business operations, forecast staffing needs, and above all else, reduce costs. As a result, workforce planning is no longer a fad; it is a necessity. (Bersin & Associates is conducting a survey on this topic and we would love your participation. In return, we will provide you with an executive summary of the findings.)

Companies such as T-Mobile and McKesson are stepping up to the plate by establishing a formal workforce planning process with a designated leader in order to achieve results. So, what exactly is workforce planning? How can it help organizations achieve these goals? And why should you care?

Workforce planning can help you strengthen and empower your role in the company by doing exactly what recruiters have been trying to do for the past 10 years: get a seat at the table. Workforce planning is a set of business processes which analyze the supply and demand of talent, ensuring that the organization has the right people in place to execute its overall business strategy. An effective workforce planning process allows you to:

  • Understand current talent gaps
  • Plan staffing and recruiting needs
  • Help business leaders forecast revenue and operating budgets
  • Drive business to partner with recruiting

Sounds simple? Don’t be fooled. Embracing the idea of workforce planning and implementing a strategic approach to your current and future workforce needs are two very different realities. Workforce planning fails when it lacks executive support, a clear methodology and business process, and the necessary tools and technology to execute the process. The workforce-planning process needs to correlate business strategies with workforce requirements. No easy task but one you should not ignore.

One important aspect to consider in workforce planning is your companies’ current level of maturity and the steps you need to take to become more strategic in your process. Mitzi Adwell of The Newman Group compares these different stages of workforce planning to driving a car. At the basic level, you are getting in your car and starting to drive with pretty clear direction of where you’re going — a staffing and headcount plan. At an intermediate level, you are looking in your rearview mirror to get a better understanding of the landscape around you (workforce analytics). At the advanced level, you are looking ahead and using your dashboard to gauge how you should proceed (strategic workforce planning with predictive modeling).

Stage One: Getting in Your Car

In the most basic level of workforce planning, companies are looking at current headcount in their organization. Some companies even take it one step further and look at forecasted vs. actual headcount in order to build staffing plans that close their talent gaps and keep them on target with their budgeted headcount. One challenge is that this level of workforce planning is often decentralized, viewing talent from the bottom up versus a top down view that prioritizes talent-sets from the most to the least critical to the business overall. This headcount analysis is performed in the individual business units and does not connect with the overall organizational business strategy.

More often than not, companies plan staffing and headcount on an “as-needed” basis when facing major external pressures or changes in workforce demographics. Volkswagen Group of America used this type of planning process when the company relocated its headquarters from Michigan to Virginia. Given that it planned to replace three-fourths of its workforce within a short timeframe, it was important to include a precise plan in short order to ensure the pipeline of talent and the timing of hires met its operating goals. Situational workforce planning like what Volkswagen did might help companies think about how to handle business plans with major talent implications. Of course the more you know and the earlier you know it, the more effective you can be at using more sophisticated means of workforce planning.

Stage Two: Looking In the Rearview Mirror

At the intermediate level, workforce planning looks at quantitative data analysis, including forecasted skills and competency needs. Companies look at a regular workforce profile with key data variables including demographic segment, compensation, turnover, and performance rating. Looking at historical trends of these variables and relationships between them helps companies to better understand their talent patterns and trends so they can incorporate that information into their talent plans going forward. Companies such as T-Mobile will rely heavily on scenario planning or “what-if” scenarios this year.

Scenario planning allows companies to prepare for different internal and external business conditions such as retirement, economic changes, and workforce demographic changes, and think through what strategies they will implement in order to overcome challenges they see through the ‘what if’ exercises.

Stage Three: Using Your Dashboard

While other levels of workforce planning inform business leaders about talent plans, a strategic workforce planning process integrates these plans with the organization’s business and financial planning. At this level, companies gain a deep understanding of their talent pipeline and how it aligns with the overall business plan of the company. Companies use technology to help map the talent needs and make more informed business decisions with cost implications.

How You Can Help Your Company?

Bersin & Associates, an industry research and advisory services company, is partnering with The Newman Group to publish a comprehensive research report on this topic. The goal of this study is to identify the current state of maturity in workforce planning processes, level of ownership, range of maturity in audiences served, processes included, and level of integration with other business planning processes.

We would love to hear from you. The survey contains 23 multiple-choice questions. Estimated completion time is 20 minutes. As a participant, you will receive a copy of the executive summary to be developed based on results of the survey and scheduled for release in March 2009. This is an opportunity to share what you know and receive great insight in return.

This article is part of a series called Polls.
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