The Path to Transformation and Organisational Effectiveness? (aka Strategic Workforce Planning)
Ahhh, Strategic Workforce Planning, may I please call you by another name? After working with you for so long, I feel the time has come my misunderstood friend. You need a rebrand. You see, it’s not you – it’s them. People just don’t get who you really are. Some think you are rostering, workforce management, project management, budget planning or Future of Work projections. Others believe they can put their fingers in the air and qualitatively guesstimate the future size and shape of their workforce, and call it by your name. Many think you are too hard, that you are just not worth it or that you are some passing fad, like fidget-spinners. I know that you are the key to linking the business plan to the workforce, that you are the true path to transformation and organisational effectiveness. The market just doesn’t get you. They just don’t DO you.
OK, so before people think I have lost my mind (too late?) I will stop the conversation with SWP, but really we need to talk about SWP. The thing about SWP is that yes, it is about the workforce – but that doesn’t mean it is another item in the “best-practice toolkit” or laundry list for HR. SWP defines that list in the first place! And not just for HR, but for the whole business, who are relying on the capabilities and skill of the workforce to deliver its transformation, digitisation or growth agendas. The workforce is the key execution vehicle for most organisations (and as we already know, their biggest asset, largest cost) and SWP is the way to optimise the workforce – so why so misunderstood? Why so not done?
Let’s take a look at the common reasons we come across…
“The benefits are unknown for the time/cost of SWP”
The impact of SWP is HUGE. Unlike many initiatives around the workforce which can deliver cost optimisation, SWP does this (and better IMHO) but also delivers top-line impact – think revenue growth and ROE. Sierra-Cedar puts companies who do SWP at an average of 10% higher business outcomes such as revenue per employee, ROE or profit per employee. Plus 12% higher talent outcomes such as engagement, succession and retention. Not optimising the workforce, too much of the wrong capabilities or wrong cost base – significant. Missing business goals, milestones or customer demand . . . catastrophic!
“SWP is not as important as my other stuff”
For too long, HR has been asking for the “seat at the table”. Then often sitting in that seat, we become just good at listening to the business decide things and taking away orders to implement – what a business partner! But are we bringing our own, commercially driven, business focused viewpoint to shape strategy, transformation and direction? The answer is often no. Did you know that SWP is now firmly on the Board agenda? AICD tells Directors to ask their leadership teams:
“what skills does our business need to meet its current objectives and how might this change over time”
“are we satisfied that they have the skills available to meet their resource needs and is there a plan in place to ensure that these skills are developed or acquired to satisfy future demand.”
Digitisation and transformation on the agenda? McKinsey has cited a lack of requisite skills and lack of leadership alignment as massive blocks in achieving successful transformation, both of which can be overcome through SWP.
“I already am doing SWP”
Are you? Really? For starters, SWP is complex. Sierra Cedar says it is “the most complex analysis efforts undertaken by HR functions.” It is true, it is really complex. This is because there are just so many moving factors that need to be brought together and integrated properly to deliver this. For example, we have:
Internal Business Context – business strategy, competitive advantage, value chain, segmentation, activity drivers, BAU (does that still exist?), transformation, digitisation, consolidation, acquisition, growth and so on
Internal Workforce Context – workforce size and shape, capability mix, employment mix, demographics, mobility, turnover, performance, engagement, productivity, efficiency, learning and development
External Environment Context – Future of Work and 4th IR, technology and automation, globalisation, regulation, geo-politics, social responsibility, economic factors
External Workforce Context – demographics, changing worker values, gig economy, labour supply chain, education changes, entrepreneurship
How on earth do you bring all of that together? SWP. That is because the bringing together of all of these elements needs to be done quantitatively – unfortunately conceptual discussions stay just that – conceptual - rarely do they incite action. SWP is the only way I have seen companies be able to effectively and proactively navigate the vast and accelerating change we are all facing. You need the ability to bring all of these elements into dynamic scenarios in order to make the right decisions.
“Finance have it covered”
OK, if you have looked at my LinkedIn profile, you will see I am a Chartered Accountant who started my career in Finance. Whilst partnering with Finance is essential, for the majority of organisations we see running “workforce planning” through their finance teams only, the focus is very much on getting a financial view of the workforce only ie. budget and cost focused. The insight into capabilities, skills, job neighbourhoods and the whole employee lifecycle is usually absent. Oh, and the fact that there are actual human beings attached to those numbers . . .
“Strategy have it covered”
Similar to above, the lens with which other functions view the workforce can be limited. This is not an uncommon dynamic. It is very typical for leaders (and humans in general) to view the world through their own lens. Hence, we often see strategies set with an assumption that the requisite workforce will just materialise and appear right as needed, with leaders unclear on what any given strategy really means for their part of the business aka "Strategy Struggles". One of my often (too often if you ask my business partner Chris) quoted faves from Joseph Jaworski in Synchronicity “a manager’s inner model never mirrors reality…it is always a construct. The scenario process is aimed at these perceptions inside the mind of a decision maker”. I have been in rooms in large listed companies where the dialogue and scenario planning of SWP has uncovered serious misalignment in business direction between CEO, COO and CFO and then brought them back together again. The scenario planning process of SWP is critical in creating alignment amongst leadership and driving superior decisioning for business success.
“I have it covered another way”
There are some great data sets out there. Really cool. All about the Future of Work, automation, the robots are coming...or not (if you are really special and your role is safe!) These range from online tools - you can enter your job into and see whether you need to chuck it all in and become a Maxillofacial Surgeon (apparently low robot risk, go figure) - right up to super pretty, complex and comprehensive datasets. The problem is that is often missing your business context and is only a bit of the picture – refer “I am already doing SWP” where you will see that there are a whole set of other puzzle pieces stuck to the bottom of the coffee mug and heading for the sink.
“I can get by with Org Redesign/Restructures”
SWP is about being proactive. We are not talking about the organisational restructuring that companies have been doing (annually, quarterly, monthly!?!?) for decades. The problem with org redesign/restructures is that they are inherently reactive, usually top-down and often short-term fixes. How many of us have lived through restructures to see the following:
Rehire the Fire – react fast to lower the cost base, getting rid of roles that are critical. Then, oops, we actually needed them – hire them back (or bring them back as consultants/contractors and pay them heaps more)
It will be cheaper, trust me - cut the workforce too far and meet the still needed demand through things that actually increase costs - overtime, contingent labour at premiums or impact on those remaining carrying increased workload and burning out, absenteeism [aka build, buy, borrow gone wrong]
Death by 1,000 cuts – let’s restructure, then again, then one more time . . . how many times have we seen years of building an organisation's culture and engagement wiped out through poorly planned, reactive programs like this
Same, Same . . . but different – let’s just reshuffle the same resources around but not really impact much at all, then wonder why nothing's changed
“I haven’t been asked to do this”
We hear this all the time. Most don’t ask for it because many don’t understand it in the first place (refer paragraph 1), let alone think HR can do this. The problem is that this stuff is critical. As above, discussions around lack of skills and future of work are firmly embedding themselves into C-Suite and Board agendas. SWP is THE key recommendation by the World Economic Forum to deal with the Future of Work and the “re-skilling revolution”. McKinsey puts organisations that use scenario modelling as 2.4x more likely to have successful digital transformation, with those having a dynamic and co-owned plan 2.9x more likely. SWP delivers this! This is why we are increasingly finding SWP being taken over by COO, CIO or whole new functions dedicated to transformation. What C-Suite executive would not want to drive this kind of an impact? HR, if it realises its full potential, is the rightful leader of this conversation as the custodians of the workforce, but it must act now.
“We will do it . . . later”
Yes we all are busy, busy, busy, and caught up in the urgency of what is in front of us and will get to that other “planning for the future” stuff later. But what if later is too late? Your business model is outdated, you haven’t been able to innovate and change and adapt? (think Kodak, Blockbuster, Toys R Us, Borders et al.) You may think that is not the role of HR, or can be written off due to external forces. But think again. Who drives innovation? Who drives and executes change? Who transforms and adapts? People. Who are people? The workforce.
“I can’t because I don’t have the right… [insert reason]”
Data. People. System. Planetary Alignment…whatever the reason, it’s just an excuse. The reality is, there is never perfect data; you will be waiting forever. People with a good understanding, let alone experience in true SWP are like unicorns, and if you find them – everyone else wants them too. As for systems, until recently I have been doing SWP for years in cobbled together (one well-known industry expert calls them “home-made”) solutions which has still been effective. The problem with systems is that the home-made versions invariably start with good old excel (which don’t get me wrong I LOVE) which is inherently unscaleable, unsustainable and does not really break down silos effectively for cross-organisational views. Or many system alternatives to home-made options may be called SWP, but really just look like excel (give or take some functionality) and/or do other workforce planning types (refer main image). So stop making excuses and get started with SWP today.
So for now, my dear SWP, I will continue to call you by your name – I just don’t think they could handle another business jargon term right now. But I sure do hope they see that you are the critical enabler of transformation and organisational effectiveness before it is too late . . .
ABOUT THE AUTHOR
Alicia Roach is the Co-Founder and Director of QHR and a recognised thought leader in Strategic Workforce Planning and Analytics. QHR has now created the eQ8 Strategic Workforce Planning Platform, to help organisations accelerate their planning for Transformation and the Future of Work using the most sophisticated technology available. You can contact her to learn more at firstname.lastname@example.org or by visiting https://www.qhr.com.au.