Workforce Planning. IHRC Workshop, June 15, 2011

Transcription

1 Workforce Planning IHRC Workshop, June 15, 2011 Arnoud Middel; Head HR Switzerland Zürich 16 June 2011

2 CEO Top Ten Challenges 2010 / survey out today (June 16, 2011) Source: CEO Challenges 2010; The Conference Board 2

3 Comfort Level With and Importance of Risks Source: MARSH RISK JOURNAL 3

4 Changing strategic environment A B? C Future is linear and predictable Traditional planning and strategy development > the future is the extension of the past Future is a set of alternative future scenarios Strategy development based on a limited number of realistic scenarios Future is a spectrum of likely scenarios Strategy development based on alternative scenarios and adjustments based on feedback mechanisms Future is uncertain Strategy development based on small steps and evolutionary processes (try and error) > semi coherent strategy Companies need to both plan and be highly flexible to ensure that ressources, skills and capabilities are globally adaptable to react to changing environments and strategy 4

5 Main Work Globalization Mobility of work and workforce Demographic shifts Skill and talent shortage Workforce Know How High turnover and need to buy or learn Technology Need for new skills 5

6 Facts Surveys repeatedly show, that many companies conduct Workforce Planning however most of them on an as needed basis triggered by: M&A, restructuring and reorganisations Change in company strategy Global expansion Business expansion Diversifying the workforce Etc. 6

7 Workforce planning has evolved over the last years integrated strategic approach looking at quantitative and qualitative aspects Trend that workforce and talent mgt become a topic on the strategic and risk mgt agenda Owned by CEO s and CHRO s Understand internal and external labor market dynamic and supply Typically co-owned by HR and Business people cost (FTE / Budget) Typically owned and managed by HR Typically owned and managed by Finance 7

8 Definition of Strategic Workforce Planning (SWP) An integrated and continuous process that identifies and addresses critical gaps between current workforce resources and future needs Typical questions addressed to ensure the organization is able to execute its mid- and long term business strategy and reach its goals are: Do we have the right people, at the right place, doing the right things? Are there opportunities for outsourcing/co-sourcing? Do we have the right capabilities and skills Are we able to recruit, train the ressources needed at the right time and at the right cost? 8

9 Strategic Workforce Planning enables companies to: Evaluate strategic business scenarios based on robust model and derive workforce implications, costs, feasability Anticipate workforce changes (retirements, new skills needed, expansion, downsizings etc) and align to biz strategy Manage risks related to human capital and it impact on strategy (e.g. skills shortage, gaps in leadership pipeline etc) Data and analysis driven basis for human capital investments and action plans to support quantitative and qualitative changes of the workforce to reach mid and long term strategic business goals Leverage talent across geographies and lines of business Adress new external and internal environmental trends/changes that could impact and change workforce Close the gap between HR and business strategy 9

10 Strategy orientation Different levels of Workforce Planning Traditional / Situational WFP Workforce Analytics Strategic Workforce Planning Business Strategy Strategic Workforce Planning is integrated into financial planning and business strategy Delivers qualitative and quantitative insights to align business and workforce strategy Workforce Analytics Workforce Analytics Workforce analytics goes beyond headcount analysis Quantitative data analysis delivers insights in diversity, demographics, cost, turnover performance etc Business Plan and Headcount Data Business Plan and Headcount Data Business Plan and Headcount Data Traditional approach focused on headcount trending Analysis of current vs forecasted headcount delivers gaps against budgeted headcount in the business plan Depth of data Analysis 10

11 Operational- vs Strategic Workforce Planning Focus Operational Workforce Planning on Detail and precision mainly on quantitative data Build on one set of assumptions (single scenario) Short to midterm focus (6 months 2 years) Often ad hoc and on an as needed basis (triggered by M&A, change in leadership, cost savings, business expansion etc.) Output: Headcount and staffing plans mainly on headcount metrics Planning period: Six months to two years Focus: Integrated and aligned with business and budget planning process Mid- and longterm focus (2 5 years) Scenarios / simulations as base for decision making Ongoing rolling process with forward, (change) thinking dialogue with senior executives on business strategy and resulting workforce implications Output Strategic Workforce Planning based on metrics and quantifiable measures beyond headcount Directional numbers (quantitative) Longterm plan that accomodates short term fluctuations while still responding to long term challenges and trends Action plans to close gaps between current and desired state 11

12 Key questions to be answered by SWP QUANTITY How many people are needed (temp, permanent, third party) by level and business line to operate and grow the business effectively? To what extent does the current workforce profile meet these requirements? How will these profiles be affected by future hiring, promotions, transfers, turnover and retirement? QUALITY LOCATION What skills and capabilities are most at risk? Where are there critical gaps? What new skills and capabilities are needed to support existing and new business products or services? What is the trajectory for internal candidates to fill these roles? How easily can external candidates be found? Are there alternative sources for indemand, critical skills? In what geographies, locations, sites will these people be located? How do geographic choices affect product or service delivery and cost efficiency? What are the best future locations to find and locate talent in a cost effective way? 12

13 Core steps of the SWP Process Implement and monitor action plans Integrate result in financial planning Define workforce strategy and plan Strategic Workforce Planning Process Workforce Analysis Implications of business strategy Analyse workforce & simulate gaps Forecast future workforce needs Environmental scan 13

14 Step 1: Workforce Analysis Process step Purpose / Source Key Questions Workforce Analysis Purpose: Create an in depth understanding of the current workforce structure and factors that influence the supply of internal workforce Outcome: Current workforce profile Source: Data will be available from the HR datawarehouse and or personnel system Demographic data # of employees / headcount Age and gender distribution Nationality and diversity characteristics Education level and qualifications Employment status (permanent, temporary etc) Length of service Competencies and levels Talent / Succession pipelines Trend data Turnover rates (voluntary and company induced) Retirement rates Absenteeism rates etc 14

15 Step 2: Forecast future workforce needs Process step Purpose / Source Key Questions Forecast future workforce needs Purpose: Assessing and determining future workforce needs (qualitative and quantitative) of the organisation to accomplish the companies vision, mission and strategy Outcome: Future workforce profile Source: Business plans Strategy papers Interviews with senior leaders Annual reports Company vision, mission, strategy Will there be a change in direction? New competitors to enter the market? Diversity goals? Technical changes: New technologies planned? New processes and ways of working? New skills needed or skills no longer required Structural organisational changes M&A activity Restructuring or reorganization Outsourcing Growth or downsizing? 15

16 Step 3: Understanding the economic context Process step Purpose / Source Key Questions Environmental scan Purpose: Get clarity on emerging trends, issues and the business environment within the relevant (labour) markets and understand supply for workforce in the relevant labour markets Outcome: Clarity on external workforce supply Source: Data from industry associations Data from government / authorities Workforce trends Attraction and retention strategies from competitors Globalisation of workforce Social trends (e.g. Declining loyalty, more pressure on balanced life style etc) Labour force challenges and trends What are the critical workforces skills on the market What other companies we are competing with? Unemployment rates? General economic trends? Regulations and restrictions (work permit, visa restrictions) etc 16

17 Step 4: Analyse workforce & simulate gaps Process step Purpose / Source Key Questions Analyse workforce & simulate gaps Purpose: Analyzing current and future workforce profile and identifying and prioritizing qualitative and quantitative gaps and shortfalls Outcome: Clearly identified and prioritized gaps (qualitative and quantitative between current and future workforce profile) Source: Data will be available from the HR datawarehouse and or personnel system Workforce needs Which are the most critical gaps for the organisation? Which gaps are related to operational short term issues? Which are related to strategic long term issues? What are the risks associated with these gaps What would happen if the gaps are not adressed and how likely is this to happen? Which risks are acceptable and which are not? Do we have the anticipated future skills or the potential to develop them? 17

18 Step 5: Define workforce strategy and plans Process step Purpose / Source Key Questions Define workforce strategy and plan Purpose: Develop plans to address identified and prioritized gaps Outcome: Defined action plan with goals, timelines, responsibilities which is aligned and linked up with business and finace processes Source: Workshop sessions and discussion with line managers, Finance, HR What are the key things that need to be accomplished and by when? what are the best and most efficient strategies to respond to the business needs? What resources and budget allocations are required to deliver the strategic plans? What do we ultimately achieve with these strategies? How will we know if we are successful in adressing theses gaps and issues? What will change and how are we going to measure it (indicators)? Which other functions need to be involved and how (Finance, HR, Legal etc)? What business cases need to be put in place to create case for action) 18

19 Step 6: Implement strategy and monitor action Process step Purpose / Source Key Questions Implement and monitor action Purpose: Implement workforce plans in a systematic and disciplined way Outcome: Agreed and signed off project plans and teams in place Source: Project management practice can be applied What is the best way to implement the workforce plans? Are the strategies aligned and linked with other initiatives and strategies? What are key objectives of each strategy? What is the likely impact on service delivery, productivity, customers and stakeholders during implementation? What is the level of change managment and communication needed? How will progress be tracked and monitored? How will the project be evaluated to see if it was successful? Etc. 19

20 8 Key Success Factors Success Factor Details Link to Business Make it relevant Purpose and outcome Be clear on the purpose, objective and outcome (global vs local vs site Workforce plans) that you want to achieve Committment / Ownership Common language Start small Process Data quality Tool Gain executive support and committment on the process and proper resourcing > SWP fails when it is viewed as just an HR issue rather than a business issue Clear and consistent nomenclature and definitions needed, especially when you run such processes on a global level (> use same expressions and definitions used in other HR core processes) SWP will not happen overnight. Before defining the final approach (top down / bottom up) focus on smaller units, countries, gain experience, integrate learnings from the past and realize first successes Ideally the SWP-process is part of the annual buisiness calender / process flow but needs in any case be closely linked to the strategic-, business- and financialplanning proces. Availability and quality of data is crucial. If you fail to produce a solid and reliable data basis for analysis and discussion you will fail A tool and technology should not drive your SWP approach. Make sure the tool is scalable and can be integrated with other tools and interfaces > a one size fits all does not exist in SWP 20

21 HR Key Success Factors Success Factor Stakeholder Management Details Business and other corporate functions should be part of the concept phase to ensure that SWP is linked to other important processes such as financial planning and business Ownership / responsibility Process Integration SWP is a core process that delivers information and insights that help to close the gap between business and HR strategy and actions. Ideally HR drives and owns the process with co-ownership from the business Make sure you not just add another Silo to your HR processes but make sure it is integrated and linked to all core processes such as TM, PM, Reward, Recruitment etc. Skills Continuity / Discipline / systematic The skills of HR people is crucial to this process. This is the place where you need the understanding of the business and the real business partnering skills to have the (strategic)dialogues with senior business leaders Make sure that SWP planning is not just an annual event but continously track action plans, give updates and link the SWP results into the other HR core processes (Recruiting, Reward TM etc) 21