DNA Trait 11: Workforce Planning

When respondents were asked if they considered their workforce data accurate, 41% responded no, according to HR.com's Human Capital Management Practices report. Even where workforce data is accurate, however, it may not be readily available. Nearly half (46%) of HR professionals say they do not have access to the data they need for proper workforce planning. On the positive side, 70% of respondents feel that it is possible to model workforces in a way as to optimize cost, profits and productivity. But there is a large gap between could do and actually doing.

Why is workforce planning data so often inaccurate or inaccessible? It often boils down to technology issues. "Technologies that do not share data effectively" are the most commonly cited workforce planning challenge. Nearly two-thirds of HR professionals cite this problem, according to HR.com's Workforce Planning report. 

Like workforce planning, the goal of succession management is to ensure a steady supply of ready-now talent tied to long-range plans. Yet, only 58% of large organizations (over 1,000 employees) and 29% of smaller organizations have a formal succession process in place. Worse, just 34% strongly or very strongly agree that their approach to succession is effective, according to The State of Succession Management 2019.

When companies do put a system in place, it is usually aimed at top level positions. Fifty-eight percent of HR professionals provide succession planning for executives, 54% for middle management, and 43% for high potentials. The number drops to 31% for front-line supervisors. In one sense, this is not surprising given the risk of talent gaps at the most senior levels. On the other hand, the supply of higher level leaders usually comes from a strong talent pool of leaders or potential leaders lower in the hierarchy.

Many organizations put in place a pool of high potential employees as part of their overall approach to succession. These pools include a subset of leaders chosen for their ability and motivation to take on more senior roles in the future. They usually have access to richer development experiences, job rotations and mentorship/coaching. One of the challenges for successful high potential programs is ensuring an objective and consistent process for identifying high potentials in the first place. The figure below shows the most common methods used for the identification of high potential employees. "Nomination by senior leaders" tops the list, followed by performance indicators, high-potential designations, and nominatons by direct managers. The problem is that many criteria are subjective. Ask a group of senior leaders to define "potential" and each will have their own opinions that may well vary from the opinions of their colleagues. The misidentification of high potentials can be costly. When identifying high potentials, only 29% use a talent matrix, and just 19% use behavioral assessment tools. 

There is a considerable difference in the use of practices that differentiate organizations that have an effective succession planning process and those that do not. Effective ones are much more likely to have senior management support and involvement (89% versus 45%). Seventy-two percent of organizations with an effective system say their process is well-defined, compared with just 15% of those with less effective programs. And, 54% of organizations with an effective system formally assess their future high potential leaders, versus 36% in organizations with less effective processes.

The management practice known as career planning helps both the employee and the organization. It helps employees to keep their skills up-to-date and advance their careers. For employers, it helps build a supply of talent that will more effectively enable the organization to compete. Forty-eight percent of our respondents indicate that career planning is more important today than three years ago. Only 9% indicate that it is less important. Why? Most respondents believe that career planning is associated with better retention and engagement and helps them attract top-notch talent.

But respondents also indicate they have a long way to go before career planning becomes a keystone HR system. Only one in three HR professionals feel that their employees are satisfied with their career development opportunities. And, as shown in the figure below, just over 11% of organizations feel that career planning is approached as a serious initiative with published career ladders and widely available resources. For the remaining 89%, career planning is a taboo subject or approached sporadically and only in pockets.

We divided respondents in one study into two cohorts, one where respondents indicated their organizations have top-notch career development systems (high performing systems) and one where respondents felt their organizations disagreed or were neutral about the quality of their career development systems (low performing systems).

The figure below shows the differences between these two cohorts across seven barriers. Of note is that the prevalence of barriers is far more common among those organizations with poorer career development systems. Two of these barriers were chosen by over 60% of those organizations with poorer systems: lack of career coaching skills among leaders. and a lack of formal career tracks. 

In a different study, there was another barrier that causes us some concern: a lack of HR support. Only 46% of our sample indicate that they are excited about the potential impact that career planning activities could have on their organizations. The remainder were either neutral or had little interest in career planning. It is hard to imagine career planning being successful without HR leading the way.

We found several career development practices that distinguish those organizations with top-notch systems when compared with those with less effective systems. The table below shows the effectiveness ratings between the two cohorts on 12 different career development practices and programs. Once again, organizations with top-notch systems were more effective than those with poorer career planning approaches across every item often by a factor of three or more. The top-notch cohort is also more likely to report they have a more disciplined approach to career planning and invest more than double in employee training and development.

At the end of the day, better career planning impacts company performance. The high performing system cohort were 80% more likely to report above average employee engagement when compared to those organizations with low performing systems. And, they were 60% more likely to report above average employee productivity and 51% more likely to report better financial performance.