By using a more strategic workforce planning process, the organization has the ability to “see around corners”.
Creating a successful strategic workforce plan requires aligning it with the business strategy of the organization. There is good reason that business strategy sits at the top of this formula because it should drive the entire strategic workforce planning process.
One of the distinguishing factors between operational and strategic workforce planning is the role that strategy plays. In operational workforce planning, it is not nearly as essential because most of the analytical work and planning is an extension of the current state.
By using a more strategic workforce planning process, it gives the organization the ability to “see around corners”. This allows for better and more informed business decisions about their human capital. This capability allows the organization to improve talent acquisition, retention and rewards, thereby reducing labor cost, improving productivity, employee effectiveness and managing risk more effectively.
When this model works, workforce planning becomes part of the strategy formulation process and not simply a planning exercise.
Alignment is the key word that is used to describe an organization’s strategy that has effective workforce plans. Alignment occurs between the strategy and the workforce that is tasked with operationalizing the strategy.
According to Kaplan and Norton, “Only 10% of organizations execute their strategy successfully.”
“The real differentiator between successful and unsuccessful companies is their ability to execute strategy.” — Bossidy and Charan.
The first step is using the business strategy as the guidepost for strategic workforce planning.
Ground zero in this process is defining the critical workforce issues. It is all about having the workforce needed to execute the company’s strategy. While it can get very complex, at its core it addresses some simple but critical key points:
- The impacts of demographic shifts and external factors that affect the marketplace.
- The new roles and competencies are needed in the workforce.
- The gap between talent supply and demand.
- How are you to meet the demand for labor?
- Do you have the right people in the right jobs with the right skills?
Based on the defining strategy, one of the critical workforce issues is to determine the roles needed that will drive the strategy. What role within the organization has the most effect on success or failure? It is necessary to focus on those roles that are vital to implementing strategy and accomplishing the organization’s mission. This prioritization provides the organization with the greatest opportunity for success.
Once the strategic roles have been determined, the rest of the strategic workforce planning process functions much more smoothly.
From this point onward, the focus should be on this segment to enable the organization to reach their desired future state.
It is not about workforce planning for the entire workforce, because that would be impractical. And it is not about “one size fits all” workforce planning because that would not be effective. It is all about the essential segments that must be understood, analyzed and optimized, both now and in the future.
This is why defining the critical workforce issues are paramount at the beginning of the process. Coupled with the organizations strategy enables you to develop the framework needed to guide it through and attain the level of success that is needed.
In our next blog post we will continue along the workforce planning journey as we dissect workforce gaps and surpluses.
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