A X I O M C O N S U L T I N G P A R T N E R S    

RESEARCH  

Ten  Workforce  Planning  Practices    That  Leading  Companies  Use  to    Their  Competitive  Advantage    

By  Aaron  Sorensen,  Ph.D.,  Partner  and  Juan  Pablo  Gonzalez,  Partner    

 The  evidence  is  clear:  Strategic  workforce  planning  is  now  seen  as  an  

important  source  of  competitive  advantage  at  many  leading  companies.  

According  to  the  Society  for  Human  Resource  Management,  more  than  

66%  of  organizations  with  more  than  25,000  employees  and  40%  of  all  

organizations  surveyed  conduct  strategic  workforce  planning.  Further  

evidence  was  presented  at  the  4th  annual  Talent  Management  Alliance  

Workforce  Planning  conference,  which  featured  case  studies  from  

Proctor  &  Gamble,  PepsiCo,  IBM,  Accenture,  The  Hershey  Company,  and  

a  keynote  address  from  Dr.  Alec  Levenson,  Senior  Research  Scientist  at  

USC’s  Center  for  Effective  Organizations  .  

Furthermore,  there  is  evidence  that  the  discipline  is  maturing.  Axiom  

Consulting  Partners  examined  the  workforce  planning  (WFP)  practices  of  

10  leading  organizations  in  2014.  Among  the  important  discoveries,  

workforce  planning  is  becoming  more  integrated  with  talent  

management  practices  and  workforce  analytics  and  is  being  viewed  a  key  

component  of  strategic  and  operation  planning.  More  specifically,  our  

research  uncovered  10  leading  workforce  planning  practices  that  other  

companies  should  consider  to  improve  this  critical  capability  and  build  a  

sustainable  competitive  advantage.

 

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1 :  Promote  WFP  as   a  “ l ine -­‐owned”   co re  bus iness  p rocess    

There  was  complete  consensus  among  the  executives  we  interviewed  that  WFP  must  be  a  “line-­‐owned”  core  business  process,  not  simply  an  HR  function.  In  fact,  these  companies  view  workforce  planning  on  par  with  financial  and  operational  planning.  Participants  said  that  WFP  is  most  valuable  when  it  enables  line  leaders  to  make  better  decisions  about  how  to  plan  their  hiring  in  line  with  changing  market  conditions  and  with  shifting  strategic  priorities.  As  one  participant  said:  “The  annual  WFP  plan  is  aligned  with  our  strategic  plan,  and  comes  together  during  the  planning  process  that  the  business  leader  drives.”  

The  leaders  among  the  companies  we  interviewed  have  already  taken  the  time  to  lay  the  foundation  for  a  total  view  of  future  talent  needs  by  ensuring  consistent  data  capture  and  management  approaches  across  the  enterprise.  “Someone  needs  to  be  the  steward  of  the  WFP  process  across  the  business,”  said  a  participant.  “Otherwise  all  the  business  units  would  be  doing  it  their  own  way—or  not  at  all.”    

Line  leaders  at  both  the  enterprise  and  local  level  expect  the  WFP  function  to  furnish  them  with  complete,  accurate,  and  timely  data  and  analysis  on  workforce  supply  and  demand.  There  was  strong  agreement  that  the  WFP  function  creates  the  most  value  when  it  enables  line  leaders  to  make  better  decisions  about  human  capital.  

2 :  Estab l i sh  a  WFP  “Cente r  o f   Exce l l ence”  

In  the  leading  companies  we  interviewed,  establishing  a  “Center  of  Excellence”  was  an  important  means  of  promoting  common  WFP  methods  and  tools  to  ensure  consistency  and  integration  across  the  organization.      

With  consistent  methods  and  tools,  the  Center  of  Excellence  is  better  able  to  integrate  workforce  data,  which  leads  to  more  efficient  and  meaningful  analysis  by  both  members  of  the  Center  and  the  executive  leadership  team.    In  addition,  having  a  Center  of  Excellence  allows  senior  leaders  to,  as  one  participant  said,  “deploy  members  on  the  team  to  dive  in  and  come  up  with  findings,  insights  and  recommendations”  whenever  a  particularly  vexing  WFP  problem  arises.  

3 :  Emphas i ze  p rocess  and  env i ronment  ove r  techno logy  

Process  trumps  technology  when  it  comes  to  creating  the  conditions  for  WFP  success.    Tools  and  technology  are  only  a  means  to  support  the  WFP  process,  participants  said.  In  cases  where  companies  built  their  WFP  processes  around  the  technical  tools  they  planned  to  use,  the  typical  result  was  poor  uptake  amongst  line  leaders  about  the  purpose  and  intent  of  WFP  in  general.    A  veteran  workforce  planning  practitioner  confessed,  “We  made  the  mistake  of  developing  a  very  sophisticated  tool  kit  that  the  HR  Business  Partners  were  to  

WFP  CENTER  OF  EXCELLENCE  

A  center  of  excellence  is  a  cross-­‐functional  team  that  is  a  shared  strategic  resource  that  transcends  any  one  functional  area  or  business  unit.  

There  are  four  components  to  consider  when  developing  a  center  of  excellence:  

People:  A  CoE  brings  together  specialized  expertise  and  provides  education  to  build  WFP  skills  in  distributed  functions.  

Process:  A  CoE  establishes  the  decision  rights  and  governance  for  WFP  methods,  tools  and  interpretation.  It  also  develops  and  promotes  industry  best  practices  and  internal  best  practices,  seeking  to  create  repeatable  and  automated  processes  wherever  possible.  

Technology:  A  CoE  drives  WFP  technology  decisions  in  broader  context,  helping  to  define  the  right  infrastructure  for  data  management,  analytics  and  disseminating  WFP  insights  across  the  enterprise.  

Culture:  A  CoE  promotes  a  collaborative  atmosphere  and    an  appreciation  the  value  WFP.    

 

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use  in  the  field  but  we  failed  because  (the  tools)  were  unsustainable.”  

Other  participants  spoke  highly  of  the  value  of  processes  that  engaged  others  in  building  an  appreciation  for  WFP.    As  one  WFP  leader  said:  “Our  ability  to  engage  with  the  leadership  team  and  help  them  understand  the  value  of  WFP  was  key  to  our  success.”    

Another  participant  said:  “What  created  the  most  impact  for  WFP  was  listening  to  our  stakeholders  and  ensuring  that  we  understood  their  needs—and  they  understood  our  capabilities  to  address  those  needs.”  

The  bottom  line:  To  create  the  conditions  for  WFP  success,  focus  on  process  definition  and  stakeholder  management  first,  before  introducing  tools  and  technology.  

   

4 :  Promote   s tandard  and   f l ex ib le  methods  and   too l s  

At  leading  companies,  WFP  standards  represent  a  delicate  balancing  act.  There  is  real  value  in  having  centrally  managed  tools  and  methodologies,  but  some  degree  of  flexibility  is  essential  to  accommodate  local  business  conditions  and  needs.  “Our  WFP  Center  of  Excellence  is  made  up  of  consultants  and  ‘quants’  that  follow  methodology  and  support  the  process,”  said  one  executive,  “but  the  focus  and  application  is  determined  at  the  local  level.”  

The  leading  organizations  invest  more  time  in  understanding  the  needs  of  their  leaders  as  opposed  to  ensuring  strict  compliance  with  the  stated  methodology.    “Our  tools  and  methods  are  centralized,”  one  company  said,  “but  our  process  is  decentralized.”    When  this  is  the  case,  senior  leaders  are  able  to  both  have  an  enterprise-­‐wide  view  of  workforce  demand  and  supply  while    

Promote  WFP  as  a  “line-­‐owned”  core  business  process

Establish  a  WFP  “Center  of  Excellence”

Emphasize  process  and  environment  over  technology

Promote  standard  but  flexible  methods  and  tools

Keep  the  WFP  process  agile

Use  pilots  for  proof  of  concept

Integrate  data  capture  with  core  business  processes

Focus  data  collection  internally

Continuously  adapt  talent  taxonomies

Align  line  leaders  around  common  WFP  practices

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TOP  TEN  PRACTICES  FROM  LEADERS  IN  WORKFORCE  PLANNING  

The  following  practices  were  identified  by  all  participants  as  creating  value  in  workforce  planning.  The  order  that  these  practices  are  listed  is  generally  based  on  the  progression  that  leading  companies  take  to  establish  an  effective  workforce  planning  capability.    

 

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providing  line  leaders  the  flexibility  to  collect  and  analyze  data  in  the  way  that  makes  the  most  sense  for  their  respective  business  units.  

5 :  Keep   the  WFP    process   ag i l e  

At  leading  companies  workforce  planning  is  not  a  “one  and  done”  annual  exercise.  In  addition  to  periodic  calendar-­‐driven  WFP  initiatives,  these  companies  have  the  capability  to  rapidly  deploy  WFP  resources  to  address  emerging  workforce  challenges  across  the  business.  As  one  participant  said,  “Our  WFP  consultants  frequently  conduct  deep-­‐dive  analyses  on  critical  roles  that  are  key  to  our  strategy  or  for  businesses  that  are  experiencing  a  talent  acquisition  challenge  that  cannot  be  addressed  through  the  normal  WFP  process.”  

That’s  not  to  say  that  process  discipline  isn’t  important.  The  common  attitude  well  expressed  by  one  study  participant:  “We’ve  built  variability  into  the  process  to  allow  for  the  necessary  flexibility...we’re  trying  to  be  less  rigid  now,  but  where  we  don’t  budge  is  on  the  timing  and  cadence  of  when  and  how  the  plan  must  be  completed.”  

A  best  practice  for  workforce  planners,  according  to  our  research,  is  to  proactively  engage  line  leaders  throughout  the  year  in  discussions  about  current  and  future  talent  needs,  rather  than  waiting  for  regularly  scheduled  workforce  planning  tied  to  annual  business  planning.  

6 :  Use  p i lots   fo r  p roo f    of   concept  

The  example  of  companies  that  have  successfully  embedded  workforce  planning  into  their  operations  is  instructive.  Leading  companies  often  use  a  WFP  pilot  to  create  an  early,  highly  visible  “win.”    One  participant  explained  how  a  particular  situation  provided  the  opportunity  to  conduct  a  pilot:  “We  had  a  market  that  was  doubling  in  size  in  our  international  market  and  turnover  was  off  the  charts,”  he  said.  “We  needed  to  help  the  local  leadership  team  create  a  comprehensive  workforce  plan.  The  success  of  that  pilot  project  established  the  reputation  of  our  WFP  group.”    

The  executives  we  interviewed  believe  that  pilot  projects  create  an  environment  where  WFP  can  be  replicated,  scaled  and  “pulled”  throughout  the  business,  rather  than  being  “pushed”  on  skeptical  line  leaders.  As  one  leader  who  piloted  WFP  in  her  company  explained:  “We’re  taken  seriously  because  we’ve  been  able  to  demonstrate  real  value.  Plus,  now  there’s  more  awareness  across  the  business  about  our  talent  priorities.”  

7 :   I n teg rate  data  capture  w i th   co re  bus iness  p rocesses  

In  order  to  keep  their  WFP  processes  efficient,  leading  companies  have  found  ways  to  integrate  data-­‐gathering  efforts  into  their  established  business  processes.    For  example,  an  organization  can  eliminate  inefficiencies  by  allowing  the  WFP  managers  to  collect  workforce  demand  data  from  information  already  

 

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resident  in  ERP  or  CRM  systems  such  as  SalesForce.com.      

However,  even  leading  companies  are  challenged  to  proactively  understand  and  quantify  emerging  workforce  demands.  “The  next  frontier  for  us  is  to  build  the  predictive  model  and  develop  a  process  whereby  line  leaders  and  recruiters  can  work  together  to  identify  likely  demand  well  in  advance  of  hiring,”  said  one  executive.  Others  are  anticipating  the  possibilities  of  using  predictive  analytics  to  automate  the  work  of  linking  demand  and  workforce  requirements.  

8 :  Focus  data  co l l e c t ion   in te rna l l y  

Leading  companies  realize  far  greater  value  from  the  collection  and  analysis  of  internal  talent  data  than  from  external  market  data.    The  collection  and  analysis  of  external  labor  market  data  is  commonly  seen  as  too  costly  and  too  general  to  be  useful  when  making  staffing  decisions.    The  information  from  local  labor  markets  is  often  outdated  and  requires  proportionally  more  effort  to  collect  than  it  can  pay  back  in  positive  impact.  As  one  company  noted:  “We  prioritize  our  (external)  data  collection  efforts  because  some  data  and  analytical  methods  are  only  appropriate  for  specific,  critical  roles  or  where  the  talent  supply  is  constrained.”    

With  internal  data,  however,  the  WFP  function  can  positively  impact  profit  margins  by  managing  workforce  deployment,  productivity  and  labor  costs,  participants  reported.  

9 :  Cont inuous ly   adapt  ta lent   taxonomies  

Across  most  industries  the  roles  employees  play  are  increasingly  specialized.    Hiring  for  more  specialized  jobs  in  turn  necessitates  a  more  specialized  talent  planning  process.  “The  way  we  staff  projects  is  really  changing,”  said  a  senior  executive  who  also  oversees  WFP  efforts  at  a  large  professional  services  firm,  “from  a  very  homogenous  one-­‐size-­‐fits-­‐all  talent  strategy  to  a  more  complex  strategy  where  we  look  to  contractors,  fixed-­‐term  employees,  and  use  of  delivery  centers  across  the  globe  for  specific  expertise  to  fill  projects.”  

Moreover,  as  roles  become  more  specialized,  increasingly  specific  talent  taxonomies  are  required.    A  talent  taxonomy  provides  a  common  language  and  hierarchical  framework  for  organizing  talent  data.  Without  sufficiently  detailed  and  comprehensive  taxonomies,  even  leading  companies  have  trouble  matching  the  skills  and  expertise  of  potential  hires  with  the  specific  needs  of  their  business.  “We  haven’t  had  a  very  specialized  approach  to  talent  planning,”  one  participant  said,  “but  now  we’re  moving  in  that  direction  because  it’s  the  reality  of  our  business  model.”  

Leading  companies  are  aligning  their  talent  taxonomies  to  the  language  of  the  business  and  making  the  necessary  adjustments  to  their  HR  information  systems.      

 

 

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10 :  Al i gn   l i ne   l eaders  around   common  WFP  prac t i ce s  

Successful  companies  expect  their  WFP  function  to  equip  line  leaders  with  the  knowledge  and  self-­‐service  tools  to  address  many  of  their  WFP  needs,  which  in  turn  allows  the  corporate  WFP  team  to  focus  on  the  most  pressing  workforce  challenges.  The  team  establishes  and  prescribes  standards  for  WFP  methodologies  and  tools,  and  then  empowers  the  line  to  utilize  them.    

But  that  doesn’t  mean  the  core  WFP  team  walks  away.  One  participant  explained,  “We’ve  established  forums  for  direct  and  regular  communication  

with  all  stakeholders,  which  enables  us  to  sustain  WFP.”  A  seasoned  WFP  leader    at  a  company  which  has  HR  Business  Partners  embedded  throughout  functions  and  geographies  said:  “As  a  small  team,  we  knew  that  in  order  to  sustain  WFP  we  need  to  build  the  skills  of  our  colleagues  so  that  they  could  have  key  conversations  with  the  line,  and  know  when  and  how  to  engage  our  group  when  they  faced  more  complex  challenges.”  

In  short,  establishing  the  right  mix  of  local  empowerment  and  cross-­‐department  collaboration  are  keys  to  driving  the  enterprise-­‐wide  success  of  the  WFP  process.  

 

 

Conc lus ion  

The  progress  that  leading  companies  have  made  offers  important  milestones  for  other  firms  to  follow  in  building  their  own  strategic  workforce  planning  capabilities.  The  companies  we  spoke  with  understand  that  successful  strategy  execution  relies  on  getting  the  right  talent  in  the  right  positions,  in  the  right  roles,  at  the  right  time,  and  at  the  right  cost.    The  recognition  of  the  value  of  superior  workforce  planning  practices  is  pervasive  across  their  organizations,  far  beyond  the  confines  of  the  Human  Resources  department.  These  companies  continue  to  innovative  and  invest  in  improving  their  workforce  planning  capabilities  in  such  areas  as  Centers  of  Excellence,  pilot  programs  and  common  practices.  Agility  is  a  hallmark  of  their  efforts  to  establish  workforce  planning  as  a  core  business  process  throughout  the  organization.  They  adapt  talent  taxonomies  to  marketplace  realities;  manage  costs  by  leveraging  internal  data;  avoid  an  overreliance  on  technological  “silver  bullets;”  and  balance  the  value  of  standards  with  the  line’s  need  for  flexibility.  

This  progress  is  impressive  but  we  believe  that  it  is  also  within  reach  of  other  companies  who  want  to  follow  their  example  and  use  workforce  planning  as  a  source  of  sustainable  competitive  advantage.  

 

Austin      §      Brussels      §      Chicago      §      New  York      §      Washington,  D.C.   ©  2014  Axiom  Consulting  Partners,  LLC.  All  rights  reserved  

 

About   the  Research  

Senior  HR  and  line  executives  from  10  companies  were  interviewed  in  the  Spring  2014.  Industries  represented  include  financial  services,  manufacturing,  high  technology,  global  restaurants  and  professional  services.  Areas  of  inquiry  centered  on  the  maturity  of  the  firm’s  WFP  capabilities;  key  enablers  and  barriers  to  building  and  sustaining  WFP;  the  impact  of  external/industry  changes;  WFP  impact  and  opportunities;  WFP  process  management;  tools,  analytics  and  technology;  and  WFP  critical  success  factors.  In  addition  to  this  qualitative  research,  we  conducted  comprehensive  secondary  research  to  obtain  further  insight  on  workforce  planning  trends,  complications  and  best  practices.    

About  Ax iom  Consu l t ing  Pa r tne rs    

For  senior  leaders  who  want  to  improve  execution  and  results,  Axiom  Consulting  Partners  is  a  trusted  advisor  that  helps  them  understand  their  situation  more  deeply,  make  choices  with  wisdom  and  take  action  more  decisively.  

We  help  clients  create  and  maintain  better  linkages  among  their  strategy,  organization  design  and  talent.  They  value  working  with  us  because  we  listen  more  than  tell,  act  rather  than  just  recommend  and  deliver  solutions  that  leave  a  lasting  impact.    

To  learn  more  visit  www.axiomcp.com    

About   the  Authors  

Aaron  Sorensen,  Ph.D.,  is  a  psychologist  with  a  background  in  statistics  and  advanced  analytics  who  brings  unique  insight  to  organization,  leadership  and  workforce  issues  that  impact  profitability  and  constrain  growth.  Aaron  speaks  frequently  on  the  topics  of  strategic  workforce  planning,  succession  planning,  talent  management,  employee  engagement  and  the  employee  value  proposition,  and  human  capital  metrics.    He  has  shared  his  perspectives  with  such  organizations  as  The  Conference  Board,  The  Institute  for  Corporate  Productivity  (I4CP)  WorldatWork,  SIOP,  HRMAC,  NACUBO.  Aaron  is  frequently  published  and  quoted  in  periodicals  that  include  Workspan,  CFO.com,  and  HR  Executive.  He  is  a  contributing  author  to  The  Talent  Management  Handbook  chapter  on  strategic  workforce  planning.  Aaron  is  a  member  of  the  Society  of  Industrial  Organizational  Psychologists  (SIOP)  and  the  American  Psychological  Association  (APA).  

To  reach  Aaron,  write  to  asorensen@axiomcp.com  or  call  312.202.3010.  

Juan  Pablo  Gonzalez  has  25  years  of  professional  experience  as  a  management  consultant  and  corporate  executive.  He  is  well  regarded  for  his  work  advising  leading  organizations.  Clients  value  the  insight,  expertise  and  collaborative  approach  that  he  shares  in  helping  them  address  challenging  problems.  His  expertise  spans  a  range  of  critical  issues  including  strategic  planning,  organization  restructuring  and  post-­‐merger  integration,  human  resources  strategy  and  strategic  workforce  planning.  Based  in  Washington,  D.C.,  Juan  is  a  co-­‐author  of  Shockproof:  How  to  Hardwire  Your  Business  for  Lasting  Success  (Wiley,  2011)  and  a  frequent  speaker  and  author  on  the  topics  of  strategy,  organization  design  and  talent.  

To  reach  Juan,  write  to  jgonzalez@axiomcp.com  or  call  703.988.3585.  

 

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