Aligning Labour Strategy For Sustained Business Success
Best practices to follow
Posted on 09-23-2019, Read Time: Min
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Volatility challenges businesses in all major industries. Most companies grapple with developing a long-term strategy that can foresee the specific impact of unpredictable changes on business performance—and creating the operational flexibility to respond.
Workforce planning has a critical role to play in helping companies develop the short- and long-term strategy to succeed, and in institutionalizing the operational flexibility necessary to effectively implement that strategy.
The extraordinary dynamics in today’s economic, political, technological, and social trends make it difficult to answer fundamental workforce planning questions. Fortunately, there are best practices companies can adopt to mitigate risk and make sure their workforce is positioned for future business requirements.
Essential #1: Tightly Link Workforce Planning to Core Business Strategy and Objectives
In many companies, workforce management is one of the last operational silos. Current and future business demands require that you fully integrate and tightly align labor—and more specifically workforce planning—with the core of the business.
Experts agree. According to Accenture, “Strategic workforce planning finally empowers companies to operationalize predictions of changing workforce supply to shape the future of work. There’s no delivering the business strategy without it—and definitely no competing as a digital business without it.”1
Obstacles:
Experts agree. According to Accenture, “Strategic workforce planning finally empowers companies to operationalize predictions of changing workforce supply to shape the future of work. There’s no delivering the business strategy without it—and definitely no competing as a digital business without it.”1
Obstacles:
- Workforce systems aren’t integrated with other parts of the business. In a global survey, Mercer found that 91% or respondents believed the data critical to answering pressing talent questions was more apt to reside in marketing and financial management systems.2
- Short-term approaches to workforce planning, combined with poor understanding of major trends in employer-employee relationships. Deloitte found that most non-traditional workers are managed tactically. In its “2018 Global Human Capital Trends” report, only 29% of respondents said they track non-traditional workers’ compliance with work contracts and only 32% track their quality of work.3
What to do:
- Implement a solution wherein relevant workforce data informs executives and other key planning and operations leaders, and operational data informs workforce planning decision-makers.
- Analyze trends in employer-employee relationships and incorporate insights into core business strategy. When asked by Deloitte to forecast the makeup of their workforce in 2020, 37% of respondents expected a rise in contractors, 33% foresaw an increase in freelancers and 28% expected growth in gig workers.4
- Make workforce planning executives full partners in developing a long-term business strategy.
Essential #2: Align Short-Term and Long-Term Workforce Planning
Skills requirements are changing. There’s a looming mismatch between the skills a company has now and what they’ll need in the future: 60% of the jobs in the 21st century require skills possessed by only 20% of the workforce.5
The expectations of the talent pool are changing. Millennials are already the largest workforce group, and in a decade will make up 75%. Generation Z, the first true digital natives, are entering the workforce. According to the Accenture Workers Value Index, emotional factors like engagement, quality of life, and status are equally if not more important to workers than income and benefits.6
While short-term workforce execution is instrumental in meeting quarterly objectives, workforce planning must take a longer view.
Obstacles:
- An ingrained, tactical approach to workforce planning. According to KPMG’s 2018 CEO Outlook, CEOs are [typically] focused on prioritizing the importance of urgently needed skills.7
- The lack of a defined workforce plan that establishes metrics to inform business strategy at varying times in the future.
- The lack of supporting technical infrastructure that can deliver consistent and evolving insights into future workforce needs.
What to do:
- Establish clearly defined time frames for your workforce plan as well as the metrics and level of detail you need for each, and use the same methodologies for all time frames.
- Take the long view to ensure your company in compliance with requirements, such as collective bargaining agreements and fair scheduling legislation.
- Stay informed of business, regulatory, political, and social trends so you have insights into how workforce requirements and availability may change.
Essential #3: Demand Precision in Your Capacity Requirements Planning
Successful businesses invariably have a precise plan for near-term capacity requirements. But a few quarters out, things can get fuzzy. To project farther into the future what skills are needed, at what levels, and at what locations, you must improve processes and supporting technology.
Obstacles:
Obstacles:
- Limited understanding of long-term external trends, such as evolving skills requirement and its impact on business operations.
- Business processes that can’t project labor requirements based on seasonal demand, production needs, adherence to labor laws and compliance requirements, and customer service standards.
- IT infrastructures that can’t support what-if scenario analysis for long-term planning.
What to do:
- Implement new IT capabilities integrating analytics, artificial intelligence (AI), and IoT into core workforce planning.
- Develop business processes to support granular analysis of projected labor capacity requirements. Go beyond what skills you will need to address things like the tradeoff between training vs. hiring new skills, and how to best use permanent vs. contract employees or outsourced labor.
Essential #4: Get the Most Out of Your Data
In most enterprises, workforce data is plentiful, but not leveraged effectively. In the 2018 Deloitte Global Human Capital Trends survey, 84% of respondents said they view people analytics as important, or very important, making it the second-highest ranked in terms of importance.8
Obstacles:
Obstacles:
- Lack of not only the basic analytical capabilities to leverage workforce-related data, but also executive technical proficiency in analytics. Deloitte found in a 2017 survey of 1,500 senior execs that only 17% were familiar with AI and its applications at their companies.9
- Executive mistrust of data that conflicts with preconceived notions. In KPMG’s 2018 CEO outlook, 78% of CEOs surveyed said that when making decisions they overlooked data-driven insights when they were contrary to their experiences.10
- The inability to integrate workforce planning data into core enterprise resource planning systems to align labor with production.
What to do:
- Inventory workforce data you already capture and develop metrics that address your critical operational success factors.
- Upgrade technology to fill gaps in data collection, storage, and analysis. Use AI analytics tools to determine the gaps and project how to meet long-term workforce requirements. “AI can streamline the process by predicting the skills that will be needed and monitoring individual contributions and productivity,” according to the 2018 Global Talent Trends Study by Mercer.11
- Be clear about the critical role human expertise plays in getting value from your IT investment. Accenture says, “Humans have nuanced judgment that machines lack. That is why people identify input variables, configure software, define algorithms, evaluate simulation outcomes, determine alternate scenarios, and implement organizational changes to align future supply with projected demand.”12
There is one common, critical success factor in the four imperatives highlighted above. That’s the need to formalize a feedback loop for all aspects of your workforce planning so you can systematically evaluate past experiences with future requirements in mind. Once you have this loop, you will need to decisively discard what hasn’t worked after carefully analyzing and learning from the reasons it failed.
Notes
1 Rouven Fuchs and Yaarit Silverstone, “Strategic Workforce Planning finally gets Strategic,” Accenture, 2016. Page 9.
2 “2018 Global Talent Trends Study: Unlocking Growth in the Human Age,” Mercer, 2018. Page 25, https://www.mercer.com/our-thinking/career/global-talent-hr-trends.html
3 Dimple Agarwal, Josh Bersin, Gaurav Lahiri, Jeff Schwartz, Erica Volini, “Introduction: The rise of the social enterprise 2018 Global Human Capital Trends” Deloitte Insights, March 28, 2018. Page 26.
4 Ibid. page 7.
5 “Strategic Workforce Planning,” Williams HR Consulting, 2017. Page 3. (On Human Resources Professionals Association (HRPA) of Canada.).
6 Ellyn Shook and Mark Knickrehm, “Harnessing Revolution: Creating the Future Workforce,” 2017, Page 12.
7 “Growing Pains: 2018 US CEO Outlook,” KPMG, 2018. Page 1.
8 Dimple Agarwal, Josh Bersin, Guarav Lahir, Jeff Schwartz, and Erica Volini, “The Rise of the Social Enterprise. 2018 Deloitte Human Capital Trends,” Deloitte Insights. 2018. Page 89.
9 Ibid. page 73.
10 “Growing Pains: 2018 US CEO Outlook,” KPMG, 2018. Page 5.
11 “2018 Global Talent Trends Study: Unlocking Growth in the Human Age,” Mercer, 2018. Page 23.
12 Rouven Fuchs and Yaarit Silverstone, “Strategic Workforce Planning finally gets Strategic,” Accenture, 2016. Page 6.
2 “2018 Global Talent Trends Study: Unlocking Growth in the Human Age,” Mercer, 2018. Page 25, https://www.mercer.com/our-thinking/career/global-talent-hr-trends.html
3 Dimple Agarwal, Josh Bersin, Gaurav Lahiri, Jeff Schwartz, Erica Volini, “Introduction: The rise of the social enterprise 2018 Global Human Capital Trends” Deloitte Insights, March 28, 2018. Page 26.
4 Ibid. page 7.
5 “Strategic Workforce Planning,” Williams HR Consulting, 2017. Page 3. (On Human Resources Professionals Association (HRPA) of Canada.).
6 Ellyn Shook and Mark Knickrehm, “Harnessing Revolution: Creating the Future Workforce,” 2017, Page 12.
7 “Growing Pains: 2018 US CEO Outlook,” KPMG, 2018. Page 1.
8 Dimple Agarwal, Josh Bersin, Guarav Lahir, Jeff Schwartz, and Erica Volini, “The Rise of the Social Enterprise. 2018 Deloitte Human Capital Trends,” Deloitte Insights. 2018. Page 89.
9 Ibid. page 73.
10 “Growing Pains: 2018 US CEO Outlook,” KPMG, 2018. Page 5.
11 “2018 Global Talent Trends Study: Unlocking Growth in the Human Age,” Mercer, 2018. Page 23.
12 Rouven Fuchs and Yaarit Silverstone, “Strategic Workforce Planning finally gets Strategic,” Accenture, 2016. Page 6.
Author Bio
| Scott Morgan is the Vice President for Infor’s Workforce Management product line. He has dedicated 20 years to the Human Resources and Workforce Management field as an academic, practitioner and accomplished leader in business. Scott has both a Masters and Doctorate in Education in Human Resources and Organizational Development from Texas A&M University. In his current role, Scott has led Infor’s WFM cloud sales and digital strategy in North America since 2010. He also served a principal role in the corporate assimilation of Workbrain (WFM) as well as subsequent acquisitions of Enwisen (HRSD), Certpoint (LMS) and Peopleanswers (Talent Science). Under his leadership, Infor’s Workforce Xi product line and digital framework has been the fasting growing Cloud destination in the industry. Scott proudly represents the most complete, flexible and industry specific suite of digital Workforce applications in the industry. Visit https://www.infor.com/ Connect Scott Morgan Follow @Infor |
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