Strategic Workforce Planning

When I think about complexities and challenges facing staffing, I think of it in terms of strategic staffing as an integrated part of workforce planning and talent management as a whole. The issues facing the function range from the expected sourcing top talent to anticipating changes in required competencies to adapting to the fluctuations in business demand. Additionally, there is the need to know the financial and business implications of filling critical jobs with contingent labor as resource pools shrink and demand grows.

PREMIUM RESEARCH: Average Contingent Assignment Length

Few of the organizations I have worked with over the past 10 years have included their entire workforce [full-time, part-time, contingent, global, etc] into their workforce analytics and planning activities. This is in large part due to the difficulty in accessing all of the necessary data, let alone being able to aggregate it with other financial data and reporting structures. This however has limited the true modeling and forecasting they can achieve, since in some cases contingent labor alone can account for more than 40 percent of a workforce. Without being able to assess who and how many are doing critical work toward achieving your business strategies, it is impossible to accurately staff for future needs. This enormous blind spot in workforce plans can lead to initiatives and business priorities to derail due to lack of required talent. In many cases, managers do not have to justify (or plan for) investments in non-FTE staff the same way, so even if talent is sourced, it is at such a premium that overall operating revenue is negatively affected no matter how successful the initiative. There are countless examples of critically skilled employees retiring or being let go during layoffs just to be hired back as a contractor for a premium price above their original salary because the work still needs to get done. Contractors are so prevalent and manage such critical path strategic work that they should be considered an extension of an organization. They should be accounted for with the same data and characteristics aggregated into the larger data asset for reporting and analysis as FTEs.

Critical business questions I ask my clients in order to assess their maturity is measuring, thus modeling, thus appropriately staffing their workforce are:

• Can you get a global headcount number and matrix view of your org, including contractors? Can you see all of your talent, learning, ERP, and HCM data in one place? Do you have any concerns about data accuracy?
• How does revenue per employee, expenses per employee and margin per employee vary by span of control? What was the average percentage increase by organization tenure, occupational group, business unit/location?
• What skills are essential for success in the next 5-10 years?
• How can we quickly staff up and also maintain a focus on the existing workforce while managing budget constraints?
• What’s the business impact of formal & informal development programs on increasing our internal supply?
• What recruiting sources yield the greatest quantity and quality of new hires?
• Which locations and roles are most at-risk of impending retirements drain?

Some key metrics organizations should be measuring to assess their staffing function:

• Net hire ratio
• Rehire rate
• New hire failure factor
• Internal placement rate
• Cost of turnover
• Average time to fill [best paired with a performance metric to assess quality of hire as well]
• Voluntary termination rate [ideally assessed by department/location/supervisor/and other key segmentations]
• Staffing rate-contingent Labor [ideally assessed by department/location/supervisor/budgets]

MORE: Onboard Temps for Better Performance 

Some key recommendations for ensuring you have the necessary talent available 3-5 years out:

• Assess current workforce skills against critical job roles
• Create sourcing strategy to recruit for critical new skills
• Create a leadership development strategy and learning curriculum targeting future needs
• Create a social media presence to build the leadership brand, attract passive candidates
• Align business requirements with behavioral outcomes for each role & career path
• Identify critical positions/persons for bench strength for future needs and succession plans

Here are two whitepapers I recently co-authored on workforce planning challenges within the healthcare and utilities industries that delve into more detail around the challenges as well as the recommendations.