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Barriers cited include lack of resources and commitment, poor technology
The critical function of aligning talent management to business goals—that is, strategic workforce planning—is recognized as an essential priority by the majority of employers, but is difficult to implement effectively, according to recently released research.
In 2014, Workday and the Human Capital Institute (HCI) surveyed nearly 400 professionals involved with strategic workforce planning at their organizations and found that 69 percent consider the function an “essential” or “high” priority at their organization, but less than half (44 percent) are actively engaged with it.
“Although most companies recognize the importance of workforce planning to their overall business success, many still struggle with successfully implementing it to create a more agile, resilient workforce that is adequately prepared to address future business challenges,” said Jenna Filipkowski, director of research at HCI and author of the survey report.
The need for a comprehensive approach to strategic workforce planning is driven by a number of issues facing organizations today, according to Filipkowski, including increased competition for top talent, growing disengagement among employees, rising demand for flexible work arrangements, the need to mitigate risk and changing business models. “The top reasons for investing in strategic workforce planning include the ability to address the workforce skill and capability gaps and changing workforce demographics, and to facilitate growth plans for new markets,” she said.
Forty-five percent of respondents reported that their organization is unprepared to meet the talent needs of the future, and another 35 percent said that they are not confident in their strategic workforce planning process. Forty percent said that business leaders do not adequately promote the importance of strategic workforce planning change initiatives. About one-quarter (26 percent) stated that their organization does not take effective action with the talent information they have.
According to HCI, three of the most essential components of effective workforce planning include:
The Strategic Workforce Planning Process
One of the most important things to note about strategic workforce planning is that there is no standard model that can be used across all companies, Filipkowski said.
“The particular status, goals and culture of the organization will determine their specific journey. At the same time, workforce planning must be integrated with other planning processes, including strategic business planning and budgeting, due to the constantly changing workplace and workforce,” she said.
So what is the right implementation approach? HCI recommends that companies include the following steps:
When asked about these steps, survey respondents reported they’ve been most effective in analyzing the current organizational state (67 percent), segmenting roles (60 percent), and performing a scan of the environment to monitor trends (56 percent). “Most struggle to tie together the current state with future scenarios and plan for resulting outcomes,” Filipkowski said.
The majority of respondents (55 percent) reported revising their strategic workforce plans on a yearly basis, followed by 13 percent who responded that they “never” revise their plans, and 12 percent each who said biannually and quarterly.
Only 43 percent of companies surveyed responded that their strategic workforce planning process is scalable across the organization, and just 37 percent said that their process is used throughout the organization.
In addition to organizational buy-in and having a clearly defined process, factors such as cross-functional collaboration and having usable data and the right technology must be in place for strategic workforce planning to be successful. Nearly three-quarters (73 percent) of respondents rated their technology as “far from the ideal” or “very far from the ideal.” Fifty-eight percent and 53 percent, respectively, said their analytic insights and interfunctional collaboration were far or very far from the ideal.
Full collaboration between people, data and technology is key to effective workforce planning, Filipkowski said. “There should be a cross-functional team with the full support of senior leaders. Data should be readily available and integrated with people skillsets to analyze and communicate insights, and technology should tie everything together to help replicate and repeat the process.”
Responsibility Must Be Shared
Survey responses showed that the workforce planning process is mainly owned by HR (56 percent), followed by a workforce planning standalone function (30 percent), the executive team (28 percent) and talent acquisition (17 percent).
“Today’s successful business leaders understand that workforce planning no longer falls strictly within the purview of HR—it must be integrated with the strategic business planning processes happening across the entire organization,” Filipkowski said.
Only 46 percent of respondents agreed that all relevant organizational functions adequately contribute to their planning process. Further, 52 percent said that their organization is not adequately staffed to conduct strategic workforce planning and only 44 percent said their company provides training to the individuals responsible for the process.
Ability to Analyze Data Critical
The data used for workforce planning comes from a variety of sources, with the majority (92 percent) coming from the HR department, and specifically from a human resource information system (84 percent), the recruiting function (80 percent), and the talent management function (79 percent).
One of the biggest barriers to using data and analytics effectively for strategic workforce planning is the lack of analytic capabilities, according to the survey results. Only 45 percent of the surveyed companies agreed that their workforce planning team is effective at analyzing data. The top challenges cited in this area include utilizing predictive talent analytics (71 percent), being able to access data that spans the entire talent life cycle (66 percent), tying talent data to business outcomes (66 percent) and integrating data from other business functions (61 percent).
“With the sheer volume of data systems in use across workforce planning, integrating human capital management systems is invaluable, especially for executives and leaders who need to have a real-time view of their workforce in order to make timely decisions,” Filipkowski said. This is why the market for corporate talent management software continues to surge forward, she added. According to Bersin by Deloitte, this market grew by 17 percent in 2013-14 and is now over $5 billion in size.
According to survey respondents, 90 percent use spreadsheets for conducting workforce planning. Of these companies, 83 percent use templates that were developed internally, 31 percent use a technology solution that was developed internally, 20 percent use a technology solution that was developed by a vendor, and 10 percent use templates that were developed by a vendor.
Nearly 8 in 10 (79 percent) companies who do not use a technology solution from a vendor say that their technology is very far or far from ideal, compared to 49 percent of those who do use a vendor-supplied technology solution.
Technology tools not being integrated with other business functions was cited by 71 percent of respondents as the top tech barrier to strategic workforce planning, followed by a lack of resources (61 percent), and technology solutions not reflecting the entire talent life cycle (62 percent) or effectively handling the necessary data and analytics (58 percent).
“Most respondents indicate that the tools and technologies they use for strategic workforce planning are not effectively working together,” Filipkowski said. “According to our survey, it is not uncommon for companies to have one tool for goal-setting and performance management, another system for applicant tracking, and separate spreadsheets for succession planning and talent management and development.”
Roy Maurer is an online editor/manager for SHRM.
Follow him @SHRMRoy
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