Business leaders increasingly agree that taking a strategic approach to planning the future workforce will unlock great value, but effective strategic workforce planning remains an elusive, somewhat mythical beast. Only a small number of organisations are really making it work for them.
Research from Henley Business School indicates that a key factor in this disconnect between word and deed is data, and in particular the capability of those involved in facilitating strategic workforce plans to use data in a different way to established practices. Although strategic workforce planning is a business issue rather than just an HR one, it is only reasonable that HR steps up and takes responsibility for helping bridge the gap that we have in translating strategy into organisational plans. It is not enough to look at it and say "if only we had better data from the business".
Business insights through data
Recent research of HR leaders across many sectors and organisations by Henley's Centre for HR Excellence shows a three-fold increase in the need for HR to provide business insights through data in the coming three years, as opposed to relying on data from the past three years. Of those surveyed, 91% said that they considered this either a moderate or major challenge for their HR function. HR has a lot of data; the question being raised more and more in research is, "Are we measuring the right things and using the data generated to provide insights relevant to business?" Strategic workforce planning is one of the key areas of concern.
It is important to be clear what is meant by strategic workforce planning. It is not about producing a bigger spreadsheet full of numbers, which is a simple resource plan, something which can only be created once there is a degree of clarity as to the need. The trouble is, by the time the data is clear, it may be too late to do anything about the gaps in capability required. This can be a serious issue, seeing as it affects an organisation's ability to deliver on the promises it is making to markets, shareholders, investors and employees. What is really needed is something that sits upstream of these resource plans, which makes it possible to predict organisational risks to the business strategy in time to mitigate them. Of course in order to do this, you need to generate data.
Engaging with the discussion early on
The paradox at the heart of strategic workforce planning is that, if you wait too long, the data is more accurate but there is nothing strategic about the insights gained. The data may raise an issue about the future workforce but if so you just have to cross your fingers and hope it is not a big one, or else it may delay the implementation of the business strategy itself. It is better to engage with this discussion while you still have time to develop strategies to manage risks, although the data itself will be ambiguous and dependent on a range of factors. To make strategic workforce planning work, you need to begin the process earlier in the process so that you can add value and manage risks. However, to do this you have to be able to operate with data in a much more macro- and scenario-based way. This is something many people currently involved in operational HR processes find difficult.
This quandary is perhaps best demonstrated by looking at how organisations have been experimenting with strategic workforce planning to date. This has been mainly based on spreadsheets and numerical data, with results that are often symptomatic of trying to force precision into something that cannot provide it. The result is that the numbers generated look accurate, but are often meaningless. Those involved with resource planning of this type can find themselves stuck in a perpetual loop of pushing the business to provide data on people needs which it is not in the position to provide, while at the same time being seen as lacking proactivity in addressing people-capability gaps. The key to breaking this cycle is to recognise that we need to leave behind our comfort blanket of spreadsheets and numbers, roll up our sleeves and dive into the cloudy world of strategic capability strategies. This means asking business questions in a different way, and applying different skills to the answers.
Adding value in the strategic workforce planning space has, in fact, little to do with systems and spreadsheets, and everything to do with an individual's ability to hold a particular kind of conversation with a business client, and to be able to work with the data generated in a particular way.
Henley research, and experience working with organisations on strategic workforce planning, shows that the pivotal conversation revolves around the following five questions/considerations:
- What are the people implications of the organisational strategy? Deducing the type, rough phasing and approximate scale of resources and skills implied by the strategic plan.
- How does this sit alongside what we have? Understanding how this compares broadly, to what we have or plan to have.
- What are the critical gaps and issues? Understanding what gaps need to be addressed and by when? Understanding whether or not we have a problem. Feeding critical dependencies back into strategic process.
- What are the strategies to address? Identifying the appropriate route to close the gap in the given time - Internal? External? Develop? Buy? Acquire?
- Connecting with operational processes. Moving requirements into execution phase as appropriate, iterating, converging and monitoring need and progress. Making friends with finance.
It involves the following five capabilities:
- Tolerance of ambiguity. Comfortably working in an environment where there are no black and white answers. Asking the right questions to create a workable level of structure.
- Organisational development and diagnostic skills. Using diagnostic methodologies with business clients to help pull out the potential organisational implications of strategy and looking across the organisation at enablers/blockers.
- Comfort working with macro-data. Scenario planning, trend analysis, understanding approximate scale and type of resource need, importance of the gap between the current organisational state compared to the future one.
- Judgement and deductive skills. Choosing the right strategy. Assessing the relative importance of the issues and determining the most effective solutions.
- Application of pragmatism and flexibility. Being realistic. Understanding you cannot solve everything so you need to develop a strategy that covers most of the risks for an acceptable effort. Accommodating changes in requirements over time.
Working with macro data becomes absolutely central to breaking through the value barrier here. We must leave behind the mindset of "tell me how many Java programmers you will need globally three years from now" because the reality of the answer is usually "it depends". At this point, those without the skills to work with macro-data fall back into the comfort of "tell us when you know, but hurry up about it", when the reality is that the business needs your help in tackling the question.
Nick Kemsley is co-director of the Centre for HR Excellence at Henley Business School. This is the first part of a two-part article on strategic workforce planning.
Note: For the Henley Business School research, 86 senior HR leaders took part in the survey, mainly HR directors, more than 60% of whom were from multi-nationals, across 26 industry sectors. Eighteen in-depth face-to-face interviews took place with HR directors in well known global organisations.