A New Look at the Supply Side of Workforce Planning

The days of carefully assessing and predicting future needs for a wide range of job types and then rolling those up to a master staffing plan are gone. Even a few years ago in a Workday/HCI study,¹ 69 percent of respondents reported that workforce planning is essential or a high priority in their organizations, but 45 percent reported that they were unprepared for the talent needs of the future. With globalization and innovative new technologies, workforce definitions and requirements have emerged that require a new, agile approach to workforce planning. While originally reserved for fast-paced technology businesses or pockets of low unemployment, this new approach is becoming a requirement for most traditional businesses such as banking, manufacturing, services, nonprofits, and even agriculture. 

The implications of these seismic changes for workforce planning are significant. The CEO of a major food distributor in a 2-percent unemployment locale told us this year that he simply cannot find enough people to fill jobs in warehouses, choking off as much as 20 percent of growth over the past several years. How can he plan his workforce in such an environment? Even in a down economy, many of these issues will not go away—some may be postponed, as happened during the 2008-2010 great recession, but skills shortages in many areas are large. A recession may minimize, but will not eliminate, talent gaps, nor will it aid future understanding of new and emerging jobs.

How does an organization plan for the future in this context? Does one take old workforce planning paradigms and simply accelerate them in some way? Do we throw out all notions of planning and react day-to-day? How will an organization garner the talent required for success—that is, how can an organization exercise more control over its current and future talent supply? In this article, we argue for changes in both talent-supply and talent-demand thinking, and for creating an agile and fulfilling organization—one that uses long-term radar, has high adaptability, and is a compelling place to work. 

An organization that can project potential future products or services and the related skill groups that will be needed, and can build an agile talent incubator, will be more likely to weather the risks and uncertainties than its competitors.

Many organizations use sophisticated workforce planning tools to manage their talent pipeline—but, these are no longer sufficient. We propose that, by applying science as well as art in an agile culture, it is possible to both prepare and implement a work planning strategy using strategic workforce agility. This approach requires continued attention to current and future demand, but it places increasing emphasis on understanding and managing the supply side—the talent on which the organization will draw.

First, we consider the talent-demand side. Some, such as Peter Cappelli in his book Talent on Demand,² argue for throwing out legacy frameworks of planning and replacing them with more market-driven models. The fact is that market forces are upending legacy mindsets—no longer can recruiters believe that there is ample talent waiting in the wings or “we can buy it when we need it.” The good news for agile leaders is that these forces are affecting everyone, and employers who can adapt more quickly will have a competitive advantage. 

The same technology advances that are leading to disruptive change are enabling work to get done in ways that would not have previously been available. News stories written by computer; surgery performed by robots controlled by physicians in another room or another country; self-driving trucks delivering cargo on long-distance routes; and part-timers working from home serving critical roles on teams for product development and project management are a few examples. These and many other once unheard-of innovations are already at various stages of implementation. Agile planning means awareness of these trends and how rapidly they are coming to fruition—and considering how they will affect your workplace.

One approach used in marketing and strategic planning is to probe futurists and a variety of experts to come up with potential future work environments and products and services and then to extrapolate the type of talent that may be needed to succeed in those worlds. Most of us would not have guessed 10 years ago that design thinking or Python programming would be skills used in HR; yet today there are courses in both, targeted specifically at HR professionals. 

For example, future work scenarios might include (a) an AI world, with a majority of processes and roles performed by robots, or (b) a world dominated by gig workers rather than permanent employees. Consideration of how such scenarios might affect workforce planning will enable a more agile approach. Each of these scenarios is already evolving to some degree; staffing strategies may be quite different depending upon which becomes dominant. 

Let’s look at the area of medical technology. A world of AI might suggest that medical technology work will be highly automated, reducing demand for certain roles in place today and increasing the need for medical computer intelligence roles—perhaps roles that integrate coding, medical knowledge, and process management. In the fragmented gig scenario, firms would need to woo medical technologists carefully to ensure a sufficient supply of talent that is only partially under their control. One strategy might be to partner with a firm that provisions medical talent. Then, the company is positioned to access partner support in screening talent for hire, working with temps—possibly in a temp-to-perm situation or to reduce hiring commitments if AI becomes more prevalent.

As noted earlier, a key part of strategic workforce planning is not only to identify the talent, but to attract and retain that talent and to manage talent supply in new ways. We have identified three key opportunities to include this thinking in workforce planning:

• Developing talent that is not available externally or internally today,
• Creating a credible and compelling employer brand that is a talent magnet, and
• Building a fulfilling, agile culture.
  

Developing talent. While not our prime focus in this article, numerous authors have advocated for the criticality of employers getting into the education business,^3,4 a movement that has gained strength with increasing gaps in STEM skills and more recently increasing barriers to immigration. Even if there was open talent trade, many skill areas will not have enough talent without proactive interventions by employers. 

But often underplayed in this movement is retraining of current employees. There has been a bias in the market to downsizing one skill set while hiring new workers in another skill group. According to the Wall Street Journal,⁴ “letting go of people whose skills are becoming obsolete remains a stock response to shifts in business strategy in part because shareholders can more readily understand a plan that calls for simultaneous layoffs and hiring rather than a resource-intensive training initiative, workforce planners say.”

The problem with that thinking, says Paul Dougherty of Accenture,⁴ is the “buy, not build” approach is getting more difficult and more expensive as ready skills dry up. While some stop-start staffing is inevitable, internal development is increasingly a good investment, not only because of cost and available talent, but because of culture. It may not be possible to include all employees whose jobs have changed in such transformations; however, it is important to recognize that many current employees also bring two important elements with them that often undermine new hires—their alignment and engagement. Most current employees are already aligned with the mission and engaged in what they are doing; in contrast, one of the leading causes of turnover among new outside hires is poor cultural fit. 

Deloitte rates improvement in learning and development as the top-rated trend for 2019—largely based on the need to find workers with new skills.⁵ A report by ATD indicated that training budgets have only increased 2 percent from 2016-2017—to about $1,296 per employee.⁶ While training investment has increased each year, it is outpaced by the investment necessary for termination packages, recruitment, and onboarding. The Society for Human Resource Management (SHRM) estimated that in 2016 the average cost to replace an employee was $4,425—and likely much more when considering the cost of covering the work before a replacement is found, training the new hire, and facing the fact that—according to the same SHRM study—25 percent of those new hires will leave within the first year.⁷

Fulfillment at work entails achieving one’s career goals and creating a productive lifestyle that brings a sense of accomplishment, balance, impact, and happiness.

Companies are beginning to address this issue head-on. JP Morgan has built a skills platform that enables its employees to self-assess skills, and view future potential paths and training they can take to migrate to new roles.⁴ AT&T has had 180,000 people take advantage of its “Future Ready” program, providing a number of ways to retrain and upskill, significantly reducing the need for outside hires.⁴ Amazon has mapped out a way in which $15 per hour warehouse employees can train their way to $30 per hour data technicians.⁴ And, in July 2019, Amazon announced “Upskilling 2025”—investing over $700M, to retrain 100,000 U.S. employees by 2025. This plan includes areas like cloud computing, machine learning, and medicine—Amazon even covers skill areas they don’t need today, but may require in future—and areas that may enable employees to find work outside Amazon, if necessary.⁸ Even this investment is seen as a starting point only, based on the magnitude of technology-driven change anticipated in job structure, according to a panel of tech executives and human capital experts convened by Fortune.⁹

Building a compelling employer brand is both a readiness and retention strategy, enabling an organization to bring in the most desired talent, and often overlooked, to keep the talent in which it has already invested. By creating a distinctive and attractive employer brand, an employer has a distinct advantage of speed of response to shifts in the landscape. 

Attractive brands must have features that are compelling to current and future workers, be realistic, and differentiate from competitors.¹⁰ If a firm is offering the same as everyone else, it becomes nothing more than a commodity brand. The key is distinguishing the culture in some fashion—innovative, flexible, top pay, highly developmental, green focused, societally noble mission, or perhaps most secure with sound benefits. Differentiated employer brands must find a few combinations that attract sufficient talent and that are aligned with the leadership values and operating style of the company. 

Also, what is presented must be realistic. Saying you are flexible, while meaning only that you expect employees to jump at a moment’s notice, is not likely to engage employees who expect flexibility to be more about openness and adaptability to the individual differences they bring. Too often in our case experience, there is a gap between the espoused and actual brand—a quick focus group or two with current employees is often illuminating in identifying which brand features are truly compelling and which are flights of fancy. A compelling way to build a great brand is by linking it to fulfilling workplace experiences. 

Building a fulfilling, agile culture. A key part of workforce planning is not only to identify the talent, but to attract and retain that talent to your organization and to manage talent supply in new ways. For the better part of two decades, engagement has been seen as the driving force in attracting and retaining talent and a frequent gap.¹¹ Volumes have been written about the ways in which companies can engage the employee—programs aimed at employees to encourage them to connect more fully with the organization. But is engagement enough?

In recent research conducted by the Metrus Institute and published in Fulfilled! Critical Choices: Work, Home, Life,¹² we found that fulfillment—achieving one’s dreams and creating a lifestyle that brings exceptional happiness and inner peace—is a universal personal goal, regardless of generation, gender, ethic group, or other demographics. We also learned that the two biggest factors influencing such fulfillment are work and relationships, often running neck and neck in importance, and often shifting as individuals move through different life stages. For purposes of this article we will focus on the work side of the equation, where most people spend over half of their awake time. Fulfillment at work entails achieving one’s career goals and creating a productive lifestyle that brings a sense of accomplishment, balance, impact, and happiness. Organizations that recognize this, and endeavor to connect with employees in that area will have a powerful advantage in creating their desired workforce. 

We have previously done research identifying the key factors that are powerful drivers of organizational performance. It turns out that these same three factors are key aspects of fulfillment:

• Alignment—the extent to which one’s personal vision, values, and goals are aligned with the organization’s vision, values, and mission.
• Capabilities—having the valued skills, tools, and information to succeed in this job and future ones.
• Engagement—how passion and energy are unleashed.

In a world of scarce talent, with an increased premium on individual needs and preferences, a fulfilling organization offers an environment that, instead of focusing solely on short-term engagement activities, focuses on the match of individual and organizational goals and priorities, skills development needed to succeed in the future, and unleashing passion and untapped energy. Who is likely to be the most fulfilled by working in this organization, given its areas of focus, values, and goals? Can it provide a work environment that will be valued by this employee in a way that creates value for the organization and for her/him? 

To be clear, we are advocating for selecting, developing, and retaining talent by consciously considering and integrating personal goals, skill aspirations, and interests into the work unit context. This requires diversity-smart coaches and mentors—not authoritarian one-size-fits-all bosses. In a fast food study, we found that the highest performing restaurant leaders often take diverse talent (e.g., part-time students, caregivers, careerists, multi-generation) and weave it into a cohesive team that serve guests well, leading to superior results. The one-size bosses doling out directives to the “average” employee were drowning in poor customer ratings and high employee turnover. The superior leaders understood their people beyond the walls of the restaurant and used that knowledge to blend them into a high-performance culture.

But fulfillment is not enough in a dynamic environment in which our ability to plan for the future is paramount. The culture must also be agile. When fulfillment is combined with an agile culture that can react quickly and decisively to demand changes caused by new business strategies or external conditions, the impact of a fulfilling organization is multiplied because it enables the organization and its people to shift focus, priorities and skills over time more nimbly. We place a strong emphasis on agile because it drives different actions in hiring, onboarding, performance management, and rewards. For example, if one hires employees with a premium placed on agility, those employees will be more willing to reskill for the future, adjust to demand changes in the environment, and are likely to find fulfillment in the adapting organization. 

Agile thinking requires rewiring many of the old ways of work—HR systems such as performance management need to be re-aligned. Reviews focused solely on past performance, pitting employees against one another in ranking systems, and treating roles as static will not allow the organization to evolve in a dynamic fashion. In a fulfilling, agile culture, reviews meld into coaching and mentoring aimed at re-aligning employees to changing market demands, reskilling, and seeking ways to unleash creativity and untapped energy. 

There are several ways in which focus on employee fulfillment pays off in what we are calling the new fulfilling organization, implying that fulfillment is not only an individual phenomenon but also a characteristic of the organization in relation to all of its stakeholders—environments that fulfill customers, employees, contractors, and shareholders because they optimize payoffs for all. Workers—employees, contractors, and suppliers of all types—who are aligned, capable, and engaged create most satisfied customers, deliver higher quality products/services, and are more productive overall. Better yet, they stay longer.^13,14 

A fulfilling organization is one that enables the achievement of longer-term goals across all stakeholders mentioned above. It provides a stepping stone to financial returns, leads to a high-value product or service, and provides skills that support the organization en route to career goals. Money is important, but when financial considerations are equalized, the more compelling organization to work for is one that enables you to begin fulfilling your goals, whether that be a temporary stepping stone (e.g., gaining a key competency or experience) or a more permanent track to a desired role (e.g., senior leader and influencer). 

Here are some practical ways to begin addressing planning more holistically:

1. Look for broad skills rather than narrow job descriptions. Are you building a bank of critical competencies that fits likely alternative future scenarios? Rather than focusing on individual jobs, looking to competency clusters can make planning saner. For example, relationship skills will always be crucial regardless of the medium—in person, phone, or chat help desk. Building sufficient relationship skilled individuals will enable one to potentially leverage that talent in multiple directions over time. 

2. Adjust hiring criteria. Are you attracting talent that is likely to be fulfilled in your organization? Not only are they competent in the current skills desired, but can they adapt in the future to new requirements? Are they likely to be aligned and engaged in your culture and with the leader they are assigned to? The person with the best competency fit may not be aligned with the values, may chafe with leadership styles, or simply not be engaged in this environment. The key is to hire not only for skill fit, but also for the potential of the hire to be aligned and engaged in your culture, and willing to adapt. 

3. Create learning cultures. Does the organization provide an environment in which people can grow their capabilities, ranging from current jobs to future ones? Can they also grow as individuals in this environment, perhaps in non-work ways as well? Do they have time to become a better parent or volunteer and retool in a world of faster skill obsolescence? Leveraging current known talent resources (employees, contractors) allows for more predictable future talent if it can be harnessed. We recently ran into a multicultural IBM team in Nepal that was celebrating a month of volunteer work in India. The work was not directly related to their daily jobs, but it served to cement this team into a cohesive resource network, one that enlarged cultural understanding and increased loyalty to IBM for their commitment to something these individuals valued. 

4. Develop fulfilling managers. Managerial skills are key in the new fulfilling organization. Do managers know how to optimize a diverse workforce? Here we are using diversity in the broadest possible sense—not just ethnic, religious, or gender diversity—but the uniqueness each person brings to the table in every aspect of his or her lifestyle. Like a great chef integrating distinct flavors, managers must move from one-size-fits-all to a fusion of unique talents and perspectives. This requires the ability to adjust teams much the way a sailor trims sails to changing winds and currents. This new agile manager is an integrator of diverse talent within the overall purpose and direction of the organization. Managers need to be less of a supervisor and more of a coach and mentor, carefully cultivating talent, understanding what fulfills their people, and leveraging organizational resources to optimize talent and organizational goals. 

5. Offer different tours of duty. The use of gig workers has increased dramatically in recent years and is expected to continue growing. Employers have typically resisted this because they believe they can control in-house labor more fully. But in a world of talent scarcity, such control is illusory and the costs of hiring and maintaining full-time employees is significant. There is no guarantee that full-time workers will stay if the organization’s work and culture are not compelling. Reid Hoffman,¹⁵ former head of LinkedIn, espoused a mindset shift from forever employees to tours of duty. A tour of duty might include re-ups of a tour (a specific project or role) or various types of tours (e.g., career-path-crossing projects or roles). 

In research conducted by Metrus Institute, we found that potential contributors divided into three categories. One quarter were solid entrepreneurs, unlikely to stay with an organization very long—ideal gig workers. A bit more than a quarter preferred a long-term employment relationship, often resembling traditional workers. However, the remaining people fell into various tour of duty groups (e.g., intern to potential full-time, hires seeking a role with a renewal option, hires primarily seeking project roles). By understanding these preferences, it is possible to hire, match, and develop talent that will be both adaptable and highly productive. Gig or tour-of-duty workers can feed nicely into an agile SWP framework, in that it allows an organization to be nimbler and shift priorities without shedding employees and rehiring others. They can provide a barometer of sorts on employer brand—if they jump ship rapidly, it may be an indicator of what employees with organizational handcuffs would do if they could. 

A fulfilled mindset and an agile culture can help in SWP because it establishes success criteria through the eyes of the contributors and focuses on alignment across stakeholders and their goals, building longer-term capabilities, and engaging talent thereby enabling the organization to be a talent magnet. This approach can greatly enhance the talent supply. When coupled with demand-side scenario planning and data analytics that narrow future talent areas of focus, an organization will have the best chance to put the right talent in the right role at the right time to achieve long term goals.  

William Schiemann is Principal with Metrus Group, Inc. and the Metrus Institute. He can be reached at wschiemann@metrus.com.

Valeria Schiemann is Principal with Metrus Group, Inc. and the Metrus Institute. She can be reached at vschiemann@metrus.com. 

References

1 Rhodes, Carl (2015). “Strategic Workforce Planning, Preparing for Today and Tomorrow” in Ulrich, D., Schiemann, W.A., Sartain, L (eds) The Rise of HR: Wisdom for 73 Thought Leaders, HRCI, 189-194.

2 Cappelli, Peter (2008), Talent on Demand, Harvard Business Press. 

3 Richards, Lance J. (2015). “Wake Up, HR! Your Talent Supply Chain Has a Problem” in Ulrich, D., Schiemann, W.A., Sartain, L (eds) The Rise of HR: Wisdom for 73 Thought Leaders, 5, 195-202.

4 Wilson, Lauren (2019). “Why Companies are Failing at Reskilling,” Wall Street Journal, April 19, 2019.

5 Deloitte, Manufacturing Institute Report (2018). “Skills Gap and the Future of Work.”

6 ATD, State of the Industry Report 2018.

7 SHRM (2017) Talent Acquisition Benchmarking Report.

8 Cutter, Chip (2019) “Amazon to Retrain a Third of Its U.S. Workforce,” Wall Street Journal, July 11, 2019.

9 Chandler, Clay (2019) “Amazon’s Worker Retraining Plan Is ‘a Drop in the Bucket,’ Says VC,” Fortune, July 17, 2019.

10 Schiemann, William A. (2018). “Creating an employer brand that attracts, grows, and retains the right people,” The Talent Management Handbook, 3ed., Berger, Lance A. & Berger, Dorothy R. 26-44.

11 Shadovitz, David, (2015). “HR Imperative: Raising the Bar on Engagement” Ulrich, D., Schiemann, W.A., Sartain, L (eds) The Rise of HR: Wisdom for 73 Thought Leaders, 257-262.

12 Schiemann, William. (2016). Fulfilled! Critical Choices: Work, Home, Life. Salisbury, MD: Secant Publishing. 

13 Schiemann & Seibert, (2013). “Optimizing Human Capital: Moving Beyond Engagement,” HR People + Strategy. 

14 Borg I, Groenen PF, Bilsky W, Jehn K, & Schwartz, S (2010). “Embedding the organizational culture profile into a universal value theory.” SIOP 25th Annual Conference, Atlanta GA.

15 Hoffman, Reid, Casnocha, Ben, Yeh, Chris (2013, June). “Tours of Duty: The New Employer-Employee Compact.” Harvard Business Review.