HCI Faculty Office Hours: Strategic Workforce Planning with Mark Allen, Ph.D.
Optimize Your Talent Strategy
What comes to mind when you think about Strategic Workforce Planning (SWP) in your organization?
Perhaps it’s a rush of confidence and pride at the success of your company’s processes, the role you played in achieving that success, and the bottom-line impact you achieved.
Perhaps it’s not.
At HCI, we’ve been studying and teaching strategic workforce planning for more than a decade. Back in 2014, we defined it as a process of defining and deploying mission-critical talent needed to align an organization strategically with future goals and objectives. In the years since, the definition remains familiar, but the details have undergone considerable transformation.
Many aspects of this complicated process have improved in lockstep with advances in technology and people analytics. Other aspects remain particularly challenging:
Despite these challenges, one trend is clear: compared to all other organizations, high performing organizations are three times more likely to make SWP a priority.
Wondering where to start? We sat down with Mark Allen, Ph.D., for a brief interview to talk about the many facets of workforce planning. Mark is a member of the esteemed HCI faculty, and has facilitated the SWP certification program for more than ten years. Among his many talents, he is also a professor at Pepperdine University’s Graziadio School of Business and Management.
We’ve heard HCI’s definition of workforce planning. What’s yours?
MARK: An easy way to start defining strategic workforce planning is to define what it’s not. When people hear the term, the first things they think of are either headcount planning or succession planning. While those might be small parts of the process, strategic workforce planning is really about developing a plan to ensure you have the workforce in place to execute your strategy.
For example, headcount planning is about numbers—it’s a financial planning exercise that we do for budgetary reasons. We need to know how many workers we need so we can budget payroll. Strategic workforce planning is about both capacity and capabilities. We’re planning ahead to ensure not only that we have enough people, but that they have the right skills to execute the strategy over the 3-5 year period.
Then, consider succession planning, which is about figuring out who will be able to fill certain positions and replace certain people. Strategic workforce planning differs in that it focuses on roles, not people. Specifically, it focuses on the roles that most directly execute the organizational strategy. Here’s a simple example—in a hospital, there are hundreds of roles. Since a hospital’s primary purpose is to deliver healthcare, doctors and nurses are the strategic, or critical, roles in the organization. The workforce planning process seeks to ensure that the hospital has a pipeline of the right skills and the right numbers of practitioners over the next several years, whereas succession planning focuses primarily on individual people and who might replace them.
We know from HCI research that high performing organizations are committed to strategic workforce planning. Why?
MARK: Strategic workforce planning isn’t just important. It’s essential. I’ve been teaching HCI’s course since it was introduced more than 10 years ago. When we started, it was a “nice to have.” It was a competitive advantage, maybe even a luxury. Now, it’s must-have because every organizational strategic plan will have a financial plan, a marketing plan, maybe even a technology plan. You must have a people plan, too.
A generation ago, when companies would have growth plans, they would plan on growing revenue. Accompanying that would be some sort of plan for growing headcount, the assumption being that if the company needed more people, it would find them. They’d run an ad in the classifieds section. Remember that? Years ago, if you needed people, you could find them.
About a year ago, we crossed a line where there are actually more open jobs in the United States than job seekers to fill them. And those who are job hunting don’t always have the right skills to plug in. We have both a labor shortage and a skills shortage, making workforce planning essential.
And it’s only going to get worse as the Baby Boomer exodus approaches. For the next 18 years, 10,000 Americans a day will turn 74. It looks like there could be more people exiting the American workforce than entering. It’s not enough to assume the talent will be available. You have to have a plan to find it, grow it, and keep it. We got a little reprieve as a result of the financial crisis a decade ago as this generation continued working to recover from that impact, but the economy is growing. The last thing you want is for your workforce plan to be “Let’s hope for a big recession so our Baby Boomers stick around!”
As an SWP instructor, can you paint us a picture? What are the best parts about facilitating classes and keeping up with trends in this area?
MARK: SWP is one of the most fun courses to teach because people come from so many different industries. Some people, such as those in aerospace or government, are facing that Baby Boomer exodus we mentioned. On the opposite end of the spectrum, tech companies in Silicon Valley aren’t worried about retirees, but they are worried about the incredible competition for talent. Many young people are entering tech or software fields, but it’s challenging to compete with companies like Google, who receive more than a million applications every year.
It’s fascinating to see the different workforce challenges across big companies, small companies, government, high tech, low tech, manufacturing, and so on. I love addressing all of these challenges and helping our class participants come up with creative solutions to their talent challenges.
Listen to the full 20-minute interview with Mark Allen HERE.