Strategic Workforce Planning: It's Not Optional
It’s quite simple: every organization starts with a strategy. Whether you are a for-profit, non-profit, or governmental organization, you have a roadmap for where you’re headed and how you intend to get there.
Typically, within the strategy there would be a financial plan, a marketing plan, probably a technology plan. And there must be a people plan. Since, in all probability, people are your organization’s most valuable resource, it would be folly to embark on trying to execute a strategy without having a plan in place to ensure that you’ve got the right people to execute that strategy.
That people plan is sometimes called a human capital strategy. It should have plans for talent acquisition, development, deployment, engagement, and retention. Most importantly, it should have a strategic workforce plan for how to ensure that you have the right mix of skills and talent to execute your strategy.
It still astounds me when I see how few organizations have a fully fleshed-out strategic workforce plan. How can you hope to execute strategy without having a plan in place to ensure the right mix of talent over the time period for your strategic plan? It is especially vital in this era of increasing shortages in labor and skills.
Some organizations don’t really do workforce planning at all. They just figure they’ll hire people as needed. Good luck with that.
Others do a rudimentary plan that gives them the numbers of employees that will be needed. While this might be an important number to have (especially for planning your payroll costs), it doesn’t speak to skills, competencies, and talent that you’ll need to execute your strategy. And typical headcount planning only looks at next year, while a true strategic workforce plan will coincide with the time period of the strategic plan (which can be five or more years).
So a good strategic workforce plan would first specify the right mix of skills that will be needed over the next several years to execute the strategy. It would look at the current supply of talent. It would look at projected attrition. It would have a plan for closing the gaps between what we have and what we’ll need. Those gaps can be closed with a combination of hiring from outside, developing from within, and using contract and temporary employees. Such a plan would require an in-depth knowledge of external supplies of talent and factors that impact labor markets. Such a plan would be detailed and complex.
So why don’t more organizations have a robust strategic workforce plan? I hear two answers to that question: it’s hard or we don’t know how. Let me address both of these.
First of all, if you think doing a thorough strategic workforce plan is hard, I am happy to tell you that you are absolutely, 100% right. But so what? Since when is your organization afraid of doing things that are hard? I recently heard this objection from numerous participants in a Strategic Workforce Planning class I was teaching for the Human Capital Institute. The complainants were from different companies in numerous industries, including aerospace, package delivery, and healthcare. I reminded that in addition to workforce planning, you know what else is hard? Making giant metallic objects fly through the sky is hard. Delivering millions of packages to their proper destinations on time is hard. Curing sick people and saving lives is hard. Your organization does hard things every day. Why are we suddenly afraid to do workforce planning? Yes it’s hard, but it’s not nearly as hard as making airplanes fly. You know what else is hard? Explaining to your shareholders why you failed to execute your strategy. Yes, strategic workforce planning is hard, but it’s absolutely 100% necessary if you want to successfully execute your strategy.
The other objection is that people simply don’t know how to do it. We have decades of experience that have made us adept at talent acquisition and development. But compared to these functions, workforce planning at the strategic level is a relatively new discipline. Fortunately, we do have tools and resources to help. There are now numerous books and articles that can guide you through the process. The Human Capital Institute has developed a step-by-step process and a two-day course that teaches the process. So “we don’t know how” is no longer a valid excuse.
Given the importance of strategic workforce and the current real lack of barriers, every organization should have a strategic workforce plan to accompany their strategic plan. Is it mandatory? Not necessarily, but then again, neither is success. If you want to successfully execute your strategy, strategic workforce planning is not optional.
If you’d like to learn more about the current state of workforce planning, I will be joining HCI’s director of research, Jenna Filipkowski, to present a free webcast on November 20, 2014 (http://www.hci.org/lib/successful-strategic-workforce-planning-through-collaboration-analytics-and-technology).
Mark Allen, Ph.D is the author of Aha Moments in Talent Management and a professor at Pepperdine University’s Graziadio School of Business and Management. He is also a senior faculty member at the Human Capital Institute, a member of the Board of Regents at Farmers Insurance, and a member of the Board of Advisors at the Global Council of Corporate Universities. He regularly consults in the areas of talent management and corporate universities.