Move beyond the routine to be prepared for the future.
The word strategic is used frequently and imprecisely. It is a common balm used to justify projects or expenses.
But upon closer inspection, what makes something strategic is the holistic and comprehensive approach with which it is addressed. Being strategic forces us to step beyond what we already know and make an educated judgment about the future.
When applied to the workforce, strategic planning is moving beyond the routine; it is being innovative and intentional about how to best acquire and retain the workforce needed for the future. And there is no better time than today to begin the effort.
Consider the example of a consumer goods hardware store.
- Routine approach: Recognize the ebb and flow of business; business increases in the summer and around the holiday season, requiring hiring surges to meet demand.
- Strategic approach: Capitalize on that trend by implementing measures to proactively capture the talent the store needs by partnering with local vocational schools and programs and building out a summer co-op or winter internship program.
The strategic approach maximizes the information that is known predictable upticks in demand while also developing relationships that the store can leverage in the future to support robust talent pools.
Business strategy + data + questions = The formula for success
You may be worried that you can't see into the future and don't know what your workforce will need or what pressures your business will be under. Who, for instance, could have seen the unprecedented rise and reach of the global coronavirus pandemic and its remarkably fast and destructive impact on economies around the world?
Don't fear the totality of the word future. There is no expectation or hope of a crystal ball. Instead, focus on the goal of strategic workforce planning: It is not to see any future but a specific future one that is grounded in reality and a keen understanding of what is happening inside and outside of your business.
Every workforce plan begins with a business strategy and where the organization is headed in the next three to five years and even the next five to 10 years. What is your company focused on?
What are the drivers that will indicate success? What skills are necessary to achieve those ends? The goal is to use data to make intentional and educated estimates on what the future of the business will need to contend with.
Consider the shift that CVS Health announced in 2014 when it began moving from a drug store and pharmacy into a healthcare organization. It required rethinking not only the products on its shelves (it famously gave up selling nicotine products and the $2 billion annual revenue that accompanied them) but also the workforce it would need to compete in the healthcare market.
More pharmacists, health system engineers, nurses, and even insurance adjuster roles are now crucial to the organization's success as a holistic healthcare entity. Its series of mergers and acquisitions have also required it to be proactive and intentional about how to best design and deploy its workforce.
Workforce plan components
The Human Capital Institute's Strategic Workforce Planning model provides a thoughtful and comprehensive approach that companies can take to shape their own workforce plan.
Business strategy. Once you have a clear picture of your business strategy, get creative. Leverage internal and external data and be liberal with your questions.
Segment roles. Begin with segmenting your workforce. Identify what roles are truly business critical and what skill sets are required for them.
A strong partnership with an HR analytics team can accelerate this process while ensuring data validity and reliability. What are the roles that have grown the most in the past two years? How is criticality defined within your organization?
Fight the urge to conflate criticality with importance. Workforce segmentation is not a popularity contest; it is a thorough evaluation to learn what roles are crucial to keeping the lights on. And in most companies, those in HR must quickly make peace with the fact that their roles do not meet the critical criteria.
Environmental scan. Follow a solid understanding of how your workforce is segmented with an internal and external environmental scan. A simple SWOT (strengths, weaknesses, opportunities, and threats) analysis can be informative and revealing. Focus on these questions:
- If we are successful in our strategy, what roles will grow the fastest?
- How difficult is it to fill those roles now? What trends are we seeing in terms of vocational training and higher education that may affect ease of hiring?
- What are the greatest workforce risks in our strategy? Are we contending with a tight labor market? High attrition rates? Supply that cannot keep up with demand?
- What innovative opportunities do we have if we deploy this strategy?
Current state analysis. Look at all the data you have collected. Where does your organization stack up against the future workforce you have outlined? How far is the gap between current and future state, and where is it greatest?
Futuring. Work out your creative muscles while you brainstorm and discuss what changes, if any, need to happen to support the organization's direction and your workforce's development. What future will you work toward?
Gap analysis and action planning. You must solve problems to fill the gaps. For example, you may need to hire talent, or you may need to redeploy colleagues. You may need to partner externally with vocational schools or build internal training programs to supplement your talent pools.
Monitor and report. Critical to any strategic workforce plan is determining the metrics of success and closely observing those metrics to ensure positive trends and a return on investment.
Measure what matters and tell it like you mean it
With the amount of data collected today, it can be easy to conflate information with utility. The metrics that matter most to leaders around strategic workforce planning are those aligned with the business plan and what hinders or helps it.
You must know your audience and meet those individuals where they are. Within strategic workforce planning, the data you provide should be clear, succinct, and relative to the business needs. Information that is comparative and understandable is compelling to business leaders.
Consider these data points:
- The supply and demand for business-critical roles
- Attrition rates that demonstrate success or may indicate a problem
- The rate of business-critical roles that remain unfilled for more than 90 days
- Labor market trends, especially within business-critical roles
- Success rates regarding partnerships and programs to build, buy, or borrow talent.
Data is best delivered with a story. Your narrative and your supplemental materials need to align.
Let the story dictate the infographics and visual aids that will help tell it and sell it. Focus on what your audience needs to hear and not necessarily on what you want to say. Remember your objective: explaining to senior leaders what is working (or not), why it's working (or not), and how to move forward meaningfully.
If at first you don't succeed, try, try again
Effective strategic workforce planning is both an art and a science that is grounded in proactivity. Failing to consider the future makeup of your company is a risk that often results in expending more money and goodwill on reactive solutions hiring blitzes, layoffs, undesired reorganizations. Such decisions can have lasting effects on an employment brand and an organization's position in the market.
A focused strategic workforce plan is not foolproof. It must be produced collaboratively and thoughtfully.
But a focused strategic workforce plan keeps a finger on the pulse of what your company and your workforce need. It empowers and enables your employer to be nimble and preemptive in addressing challenges and opportunities, constantly developing an intentional path toward success.
Read more from CTDO magazine: Essential talent development content for C-suite leaders.
