Workforce Planning

Peter HowesVice President, SuccessFactors

phowes@successfactors.com

Sep 15, 2011© Copyright 2011. All rights reserved.

SuccessFactors

Workforce Planning

Principles

2

3

Workforce Planning

5-step model

SuccessFactors Workforce

Planning Framework

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What is Demand Forecasting?

5

Estimating the demand for the number and type of employees

for each scenario (how many and what sort of people will we

need?)

Generally focuses on critical job roles for each of the agreed

scenarios

Many different techniques

Requires expert knowledge and experience

Workforce Numbers Forecasting:

Common Techniques

6

Qualitative

Nominal Group Technique

Delphi Technique

Structured Interviews

Focus Groups

Quantitative

Regression Analysis

Decision Analysis Forecasting (DAF)

Staffing Ratios/ Productivity Measure

Timeframe of WFP Forecasting

7

Forecasting is not an exact science.

Forecasting is based on what we know from past experience and

what indicators we have as to the directions for the future.

Timeframe (Years)

Degree of Confidence in Forecast

100%

210

Supply Forecasting

8

Workforce analysis

External supply analysis

Current workforce profile analysis

Supply forecasting

Forecast supply based on workforce age and turnover

Incorporating transfers and promotions patterns

Advanced modeling

Modeling internal movement and progression

Matching Supply & Demand

9

When supply forecasts are matched with estimated demand requirements, the

projections provide a simple indication of workforce number/skill surplus or deficit. The

Demand and Supply Summary Table below is a hypothetical example

Occup. Group

Current

W’Force

(FTE)

Net Demand Net Supply Difference

1yr

2 yrs 5 yrs

1yr 2yr 5yr 1yr

2 yrs 5 yrs

S1 S2 S1 S2 S1 S2 S1 S2

Managers 19 19 19 22 15 17 18 16 11 -1 -3 -6 -4 -6

Engineers 123 123 120 150 105 115 102 77 9 -21 -43 -73 -96 -106

Scientists 117 120 120 120 115 115 95 72 12 -25 -48 -48 -103 -103

Para-prof. 294 290 280 312 260 280 266 241 191 -24 -39 -71 -69 -89

Admin/Clerical

56 55 50 40 40 25 54 52 46 -1 +2 +12 +6 +21

Wages 193 190 135 160 60 80 189 184 173 -1 +49 +24 +113 +93

TOTAL 802 797 724 804 595 632 724 642 442 -73 -82 -162 -153 -190

Findings from recent

SuccessFactors

survey and Best

practices in Strategic

Workforce Planning

10

Finding 1

Organisations are using a variety of methods to measure the effectiveness of their workforce planning.

Compared to Emerging or Lagging organisations, Leading organisations tend to disproportionately focus on five outcomes:

– Accuracy of forecasting efforts – both demand and supply

– Reduction in termination and attrition rates

– Reduction in talent gap, especially for critical positions

– Reduction in time-to-fill, especially for critical positions.

Key financial metrics that can be linked to workforce planning efforts, such as revenue per FTE and profit per FTE.

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Implementing workforce planning leads to the improvement

of a number of human capital and financial metrics.

Finding 2

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Investments in workforce planning are expected to increase in the next 12 months:

– 17% of organisations expect significant increases

– 31% expect marginal increases.

100% of Leading organisations indicate workforce planning resourcing is either expected to grow or remain the same.

Do you have the necessary workforce planning expertise in your organisation?

The risk implication of this finding is that there will be a shortage in people with the experience, competencies and capabilities to conduct workforce planning.

Despite (or perhaps because of) difficult economic

conditions, investments in workforce planning are

expected to increase in the next 12 months.

Finding 3

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74% of Leading organisations have revised their plans due to the global economic crisis; 67% of Lagging organisations have not.

Indicative that the workforce plan is a true working strategy rather than just a report that sits on the shelf.

Leading organisations are far more likely to adjust their

workforce plans in response to changing economic

conditions.

Finding 4

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Organisations that place a complete freeze on recruitment are most likely to be Lagging organisations, with only 3% of Leading organisations having done so.

Leading organisations use workforce planning to be much more strategic in their approach to recruitment, using challenging economic circumstances and favourable labour markets as a way to cost effectively fill key talent gaps.

Leading organisations are far more strategic in their

approach to recruitment, retention, and other key talent management initiatives

Finding 5

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Leading organisations were less motivated by HR related issues and tended to cite reasons that were aligned with business issues and overall business strategy.

For Leading Edge organisations, the top 3 motivators were:– Business Growth

– Change in Business Strategy

– Shortage of Critical Skills.

For Leading Edge organisations, the bottom 3 motivators were: – Downsizing

– Ageing Workforce

– High Labour Turnover.

Leading organisations primarily invest in workforce planning

as a tool to support specific business strategies – not as a

tool to address workforce related issues.

Finding 6

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Leading organisations consistently report implementing a greater number, and most likely a broader range, of people initiatives:

– 59% have implemented at least four strategies

– 31% having implemented at least three strategies.

50% of Emerging organisations have not implemented any people strategies at all.

Top 5 people initiatives Leading organisations are implementing:

– Retention strategies (75%)

– Attracting talent (75%)

– Extending existing and developing new career paths (75%)

– Partnering with schools, universities etc (56%)

– Increasing range of supply sources (44%).

Leading organisations are far more likely to implement

specific talent management initiatives as a result of their

workforce planning efforts.

Finding 7

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Leading organisations are at least twice as likely to utilise a broader range of tools as Lagging and Emerging organisations.

Lagging organisations are five times more likely than Leading respondents to utilise no technology to automate their workforce planning processes.

Leading organisations are far more likely to use advanced

technologies in support of their workforce planning efforts.

28

39

84

97

120

125

142

251

0 50 100 150 200 250 300

Other

None

Talent Management Tools

Succession Planning Tools

Business Intelligence/Analytical Tools

Recruiting/Staffing Tools

Workforce Planning Tools

Excel Spreadsheets

Finding 8

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For Leading Edge organisations, the top 3 competencies needed

for workforce planners were:– Knowledge of the business planning process

– Communication skills

– Analytical skills.

For Leading Edge organisations, the bottom 3 competencies for

workforce planners were:– Knowledge of demand and supply forecasting techniques

– Determining position competencies

– Business Acumen.

Leading organisations prioritise a different, more business

relevant, set of competencies needed for those involved in

workforce planning.

Finding 9

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Overwhelmingly workforce planning is performed not for the sake of HR, but for its value to the business.

Leading organisations are more likely to structure themselves for success, having a much higher proportion of functions outside of HR running their workforce planning processes.

Results show the least effective structure is the decentralised process. This can translate to a lack of standards or cohesion of the data and the process, and it appears to deliver the least business value, the lowest reported level of competitive advantage, and statistically, you are least likely to become a Leading organisation.

Leading organisations continually push to improve the

business relevance of workforce planning – even to the point

of managing the process outside of HR

Personal observations in Workforce Planning

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What workforce planning is not

• A commitment to future decisions

• Something that is done once and forgotten about – ―a box to tick‖

• A report to go on a shelf

• Something done just by HR

• The way to fill vacancies today – staffing or budgeting

• Analysis of every role and workforce issue across the organisation

• A perfect prediction of future workforce needs (especially numbers)

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Staffing/Budgeting

1 year 3 years 5+ years

Workforce Planning

Time

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Evaluate the current workforce

to identify potential risks

Segment-specific talent reviews form an important part of demand

forecasting—estimating the quantity and quality of the future

workforce.

What job roles currently exist in your organisation?

Of those job roles which:– Conduct the core business of the organisation?– May become part of the core business under either scenario?– Have had a high number of vacancies over the last 12 months?– Have been difficult to fill?– Require a long training time in order to develop the skills for the role?– Have the largest number of staff?

Tip: Communicate how the risk of losing staff in your critical roles will

impact the business

With changes to the economy, it is

critical to create future scenarios

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Scenarios are a framework for managing change and risk.

Develop alternative views of the future based on events outside of your

control:– Issues for the whole workforce– Issues for the Industry– Issues for your Organisation.

Develop strategies for changing those things you can control.

Scenarios help us deal with the unknown.

Scenarios let us rehearse how we might adapt to future events today

(what if?).

They help us monitor the environment and look for weak signals.

Workforce Planning is a critical tool

in overall Talent Management

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Career Management - Sleeper in Workforce Planning:– 50-70% of employees will never be promoted– 80-85% of employees will have a maximum of one promotion in the rest

of their career.

Less than 5% of the workforce (deep specialists) are in the same job for more than 5 years.

Career = Positions + Projects + Placements.

New career paths build future competencies.

Emerging goal for many companies: career paths with four transfers for every promotion:– Career Path Ratio = 0.25

Workforce planning is increasingly

about risk management

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Where are the gaps

In numbers between demand and supply?

In skills between demand and supply?

Between scenarios

Which are significant? What are the risks?

APQC

Strategic

Workforce

Planning

Research Findings

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Research Findings

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Finding #1Workforce Planning is Best Managed Through a Centre of Excellence

Finding #2 Establishing a Workforce Planning Foundation Takes Time and Dedicated

Resources

Finding #3The Focus of Workforce Planning

Finding #4 Establishing a Systematic Process

Finding #5 Building a Team with the Right People

Research Findings

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Finding #6The Focus of Workforce Planning

Finding #7In Order for Workforce Planning to Be Successful, Organisations Need Active

Support from Senior Leaders

Finding #8It’s About Organisational Success – Not Just People

Finding #9Standards, Confidence, and Credibility Go Hand-in-hand With Successful

Workforce Planning

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Research Findings

Finding #10Leveraging Workforce Planning and Analytics Software Enables the Workforce

Planning Process

Finding #11The Numbers Are a Critical Component of Successful Workforce Planning

Finding #12Planning By Itself Isn’t Enough – Organisations Must Continually Measure the

Results of Their Actions

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Questions

Workforce Planning

Peter HowesVice President, SuccessFactors

phowes@successfactors.com

4/19/2011© Copyright 2011. All rights reserved.