Dallas/Fort Worth International Airport Strategic Workforce Planning ACI-NA Economics & Human Capital Conference May 4, 2011
DFW Airport Fast Facts Opened in 1974; covering 18,000 acres World Ranking 3 rd in terms of operations 8 th in terms of passengers Non-stop service 146 domestic destinations 46 international destinations Economic engine for the entire North Texas DFW Airport Board Employees 1,775 On Airport employees approximately 60,000 17billion total economic impact 8 billion in payroll annually 2 Source: The Economic Impact of Dallas/Fort Worth International Airport 2005, Texas Department of Transportation
Introduction Learning Objectives Provide DFW leaders with a framework to evaluate the status of the workforce and to develop a 3-year strategy to address the future talent and staffing needs to align the workforce with strategic goals. You will learn how to: create a baseline on the current status of your organization as well as historic trends translate your business / department goals into organization design principles (size, staffing mix, and span of control) develop organization scenarios and assess workforce impact validate and finalize a plan approved by senior leaders Reinforces Airport Leader Competencies: Focuses on Strategic Priorities Creates Vision Drives the Key Results 3
Strategic Workforce Planning Overview & Objective Focusing on Our People Strategic Importance Executing the Plan & Framework Pre-work, Executive Summary & Tool Demo Next Steps 4
Objective Integrate with Business Goals and Workforce Impact to Maximize Success Align the workforce with the strategic goals of the organization by: Providing a framework to evaluate status of the current workforce Developing a strategy to address future talent and staffing needs Determine staffing needs over the next 3-years Continue to assess impact on the workforce -- i.e., Engagement, Hiring, Retirement -- by focusing on key organization design elements Size, Staffing Mix, Spans & Levels Level Mix, Skills Mix 5
Business Goals STRATEGIC WORKFORCE PLANNING BRIEFING, 2011 Strategic Workforce Planning Overview The Workforce Plan Needs to be Integrated with Business Goals and Workforce Impact to Maximize Success Org Design Elements Workforce Impact Organization Size Staffing Mix Spans & Levels Level Mix Skills Mix Assess Impact Iterate to finalize Hiring Needs Promotion Rates Attrition Retirement Engagement Headcount Costs Workforce Productivity 6
Strategic Workforce Planning Overview & Objective Focusing on Our People Strategic Importance Executing the Plan & Framework Pre-work, Executive Summary & Tool Demo Next Steps 7
Strategic Importance of Focusing on Our People to ensure we have identified the right talent Internal Factors In order to meet Airport s Strategic Priorities TRiP Use Agreement New Airline Growth Keep Airline Costs Low Engaged Employees Vision Key Results Cost Competitive Operational Excellence Beliefs Mission Business Goal Customer Satisfaction Employee Engagement You re Important! Step up! Own It! Reach Out! Innovation Wins! External Factors And.. In order to meet market and talent supply Increased talent competition in the market Developed Markets falling birthrates rising retirements talent shortages in mid- and director level positions Emerging markets Surplus of young, inexperienced talent We must have: the right talent, with the right knowledge, skills, and abilities at the right time in the right positions 8
Strategic Importance of Focusing on Our People to align business & talent The Business The Vision Key Results Cost Competitive Operational Excellence Beliefs Mission Business Goal Customer Satisfaction Employee Engagement You re Important! Step up! Own It! Reach Out! Innovation Wins! Strategic Workforce Planning What does our talent pipeline need to be in order to meet our shortand long-term business priorities? What do we need to do to plan for, attract and select the right talent? Acquisition Performance & Total Rewards Airport Leader Competencies Learning & Development Which talent should we strategically invest in developing based on performance & potential? How will we assess and differentiate to ensure the engagement and retention of the best talent? Review / Succession Planning Which talent can best fill our business critical roles, build our leadership pipeline, and deliver on our business strategies? 9
Strategic Workforce Planning Overview & Objective Focusing on Our People Strategic Importance Executing the Plan & Framework Pre-work, Executive Summary & Tool Demo Next Steps 10
Executing the Strategic Workforce Plan 1 Create Baseline & Engage Senior Leaders 2 3 4 5 Translate Business Goals into Org Design Develop Org Scenarios & Assess Workplace Impact Validate & Finalize a Pragmatic Workforce Plan Implement & Monitor Collect data on the current state of the organization as well as historic trends Establish a preliminary set of organizational design principles Model alternative paths that the organization can take Validate workforce plan and get approved by senior leaders Changes implemented by HRBM in conjunction with department leaders Using historical trends, project evolution of the workforce project These include principles such as organization size, staffing mix, and span of control Model the organization design s impact on the workforce Modify some design principles because of the potential impact on employees Review progress periodically and adjust design principles based on feedback received Interview Senior leaders to understand business strategy Resolve any differences in opinion between leaders Assess any trade offs that senior leaders must understand and address Conduct Succession/ Review Sessions; updating plans annually Two Weeks* Two Weeks* Two to Four Weeks* One Week* Ongoing *Timing dependent on leader availability 11
Executing the Strategic Workforce Plan 1 Create Baseline & Engage Senior Leaders 2 3 4 5 Translate Business Goals into Org Design Develop Org Scenarios & Assess Workplace Impact Validate & Finalize a Pragmatic Workforce Plan Implement & Monitor Sharing information builds the leader s understanding of the organization s current performance and identifies key insights necessary to help redesign the organization. EXAMPLE Promotion Rates (into level) Attrition Rate by Level % Positions Filled by External Hiring Level FY 08 FY 09 FY 10 FY 08 FY 09 FY 10 FY 08 FY 09 FY 10 AVP 13.33% 5.88% 2.86% 13.33% 5.88% 2.86% 13.33% 8.82% 0.00% MP/IT 6 14.29% 11.46% 0.00% 1.43% 10.19% 6.21% 2.86% 1.27% 4.97% MP/IT 5 5.93% 13.33% 4.50% 11.11% 6.32% 4.50% 11.11% 11.93% 9.65% MP/IT 2,3,4 4.02% 9.38% 3.49% 9.77% 9.38% 6.40% 10.34% 11.73% 8.14% Hourly (STP and ASP) 2.53% 4.60% 2.19% 11.26% 10.44% 8.84% 9.26% 9.40% 6.97% 12
Interview Senior Leaders Determine the business issues that drive the Strategic Workforce Plan The process 1. Document current department strategy and highlight 3-year outlook 2. Identify key strengths, weaknesses, opportunities and threats based on strategy 3. Identify strategic, core, non-core and misaligned roles 4. Determine key skill sets currently lacking (need to acquire or develop) 5. Recommend best-in-class department structure based on strategy 13
Executive Summary Business Strategy Analysis Vision and strategy over the next 3-years Key Challenges Key Drivers of Success 14
Executive Summary Structure Analysis Major activities and functions in department and how will they change Essential roles needed to execute the mission / strategy Critical Non core Misaligned Attrition / Promotion Rate Goals Ideal span of control for your managers. Anticipated workforce mix (Regular full time, Part time, Temp Contractor) 15
Executive Summary People SWOT Analysis Strengths (unique value department provides to Airport, what people do well) Weaknesses (skills currently lacking, what is required to achieve 3-year outlook plan) Opportunities (advantage if the right people were in place) Threats (obstacles in obtaining talent, external market influencing 3-year talent outlook) 16
Executing the Strategic Workforce Plan 1 Create Baseline & Engage Senior Leaders 2 3 4 5 Translate Business Goals into Org Design Develop Org Scenarios & Assess Workplace Impact Validate & Finalize a Pragmatic Workforce Plan Implement & Monitor The business unit s senior leaders discuss and establish a set of organization design principles based on their future vision. EXAMPLE Organizational Design Principles Organization Size 5% annual growth over three years to meet annual business growth of 15% Workforce Mix Spans and layers Level Mix Staffing mix Skills Mix Promotion and Attrition Balance 70% of the workforce is FT internal; 5% PT internal, 10% Temps, 15% outsourced Average span of control of 10 at MP4, 5 at MP5 and above; no people managers below MP4 Equal mix of people managers and individual contributors at MP4; no same level reporting relationships 50% open positions filled through external recruiting New organizational capabilities include vendor management, process reengineering, environmental regulations Annual promotion rates will not be below 3%; maximum attrition will not be above 10% 17
Executing the Strategic Workforce Plan 1 Create Baseline & Engage Senior Leaders 2 3 4 5 Translate Business Goals into Org Design Develop Org Scenarios & Assess Workplace Impact Validate & Finalize a Pragmatic Workforce Plan Implement & Monitor We will evaluate the potential impact on employees of any proposed organizational designs. EXAMPLE Prof Mgr: Professional: 3 Year Headcount Forecast by Layer VP: 1 Employees 1 AVP: 3 3 12 Stretch: 0 Sr Prof: 15 Stretch: 1 28 14 Stretch: 1 Supervisor: 15 Stretch: 1 31 Front Line EEs: 94 94 157 Budgeted FTE Positions Current Positions Filled Position Growth Rate Temp/Outsource % Turnover Rate Retirement Rate Promotion Rate (out of level) % Filled External Hires % of Stretch Roles Desired Span of Control Workforce Planning Inputs - Year 1 Workforce Planning Inputs - Year 2 Workforce Planning Inputs - Year 3 Layer Layer Layer Prof Front Prof Front Prof Front VP AVP Mgr Sr. Prof Prof Sup Line EE VP AVP Mgr Sr. Prof Prof Sup Line EE VP AVP Mgr Sr. Prof Prof Sup Line EE 1 3 13 16 15 21 111 1 3 13 16 15 16 94 1 3 12 16 15 16 94 1 2 13 5 11 19 94 1 3 13 16 15 16 94 1 3 12 16 15 16 94 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 10% 15% 0% 0% 0% 0% 0% 0% 1% 2% 3% 4% 8% 1% 2% 3% 4% 8% 2% 3% 4% 5% 9% 2% 2% 2% 2% 2% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 8% 0% 10% 5% 2% 0% 7% 10% 5% 2% 0% 7% 10% 5% 2% 50% 90% 80% 70% 100% 50% 90% 80% 70% 100% 50% 90% 80% 70% 100% 0% 8% 0% 5% 0% 5% 5% 5% 0% 5% 5% 5% 4 4 6 4 4 6 4 4 6 18
Executing the Strategic Workforce Plan 1 Create Baseline & Engage Senior Leaders 2 3 4 5 Translate Business Goals into Org Design Develop Org Scenarios & Assess Workplace Impact Validate & Finalize a Pragmatic Workforce Plan Implement & Monitor Once the plan has been sanity checked and all employee impacts have been carefully considered, senior leadership finalizes the future shape of the organization. Layer 5 EXAMPLE - YE 20123 FTE by Layer FTE by Layer 1 1 VP Current HC 1 0 4 3 AVPs 3 2 1 3 6 MP6 Managers 1 Stretch 7 5 2 2 1 45 MP4/5 Professional s 6 MP4 Supervisors 60 ST/AS Hourly 3 Stretch 54 60 50 85 4 (25) 135 143 (18) 19
Executing the Strategic Workforce Plan 1 Create Baseline & Engage Senior Leaders 2 3 4 5 Translate Business Goals into Org Design Develop Org Scenarios & Assess Workplace Impact Validate & Finalize a Pragmatic Workforce Plan Implement & Monitor HRBMs will work closely with the business unit s senior leaders to implement and monitor the organizational design changes. Examples 20
Strategic Workforce Planning Overview & Objective Focusing on Our People Strategic Importance Executing the Plan & Framework Pre-Work, Executive Summary & Tool Demo Next Steps 21
Workforce Planning Tool Demo Workforce Planning Model -- Parking Business Unit 3 Year Headcount Forecast by Layer VP: 1 AVP: 6 Prof Mgr: 21 Stretch: 0 Sr Prof: 38 Stretch: 2 Professional: 34 Stretch: 2 Supervisor: 4 Stretch: Leads: 24 Front Line EEs: 112 0 Total Change in Headcount by Level Yearly FTE Position Plan Current Headcount Future Headcount Change Current Budgeted FTE VP 1 1 0 VP 1 1 AVP 3 6 3 AVP 3 4 Professional Mgr 18 21 3 Professional Mgr 19 23 Sr. Professional 14 40 26 Sr. Professional 40 40 Professional 27 36 9 Professional 36 36 Supervisor 16 4-12 Supervisor 17 15 Leads 50 24-26 Leads 54 29 Front Line EE 127 112-15 Front Line EE 147 125 Total 256 244-12 Total 317 273 Year 1 Current Budgeted FTE Positions Outsource Growth (Decline) Span of Control Adjustment Staffing Analysis -- Year 1 Revised FTE Positions Current Positions Filled Turnover Retire VP 1 0 0 0 1 1 0 0 AVP 3 0 0 1 4 3 0 0 Professional Mgr 19 0 0 4 23 18 0 0 Sr. Professional 40 0 0 0 40 14 0 0 Professional 36 0 0 0 36 27 0 0 Supervisor 17-2 0 0 15 16 0 0 Leads 54 0 0-25 29 50 4 0 Front Line EE 147-22 0 0 125 127 11 2 22
Strategic Workforce Planning Overview & Objective Focusing on Our People Strategic Importance Executing the Plan & Framework Pre-work, Executive Summary & Tool Demo Next Steps 23
Next Steps Finalize Strategic Workforce Planning Model (excel tool) Create an Implementation Plan to include: Change Plan Staffing Plan Review and Succession Planning Diversity Plan Re-Organization (if appropriate) Communication Plan Employee Engagement Actions Learning & Development Plan Other Actions Metrics / Monitor 24