Linking Wok Force Strategy With Business Strategy.docx

Strategic Work Force planning- Delivering strategy through People Talent Management deserves as much focus as financial capital management in corporations. Jack Welch

Work Force planning is a key activity for Talent management which makes optimum utilisation of the human resources in the organization. Work Force planning must align the Workforce strategy with business strategy to achieve the sustainable competitive advantage. By leveraging the human resources, an organization generates capabilities to achieve success even in dynamic business scenarios. Strategic Work Force planning (SWP) allows to forecast the work force requirements in medium to long term not only in terms of quantitative aspects but qualitative aspects too. (e.g Skills, Qualification and Technical and Behavioural Competencies). Integrating workforce supply and demand analysis into the strategic planning cycle ensures organisations have the ‘five rights- the right number of people, with the right skills, in the right place, at the right time and with right cost.

Before the constant change of the digital era, organizations could get by with underestimating the importance of planning as part of their workforce strategy. However, the business landscape is changing. Lower entry barriers and integrated value chains are eroding organizational boundaries and propelling industry convergence. Shifts in Business, operating models, Technology and Workforce are setting the conditions ripe for change in work force planning approach. Disruptive digital advances like Industry 4.0, Automation, Artificial Intelligence, Machine Learning will have significant impact on workforce. Aging workforce, demographic shifts, gig economy and globalization are creating turbulence in workforce supply and demand. We are at an inflection point with respect to workforce planning approach. We must understand the maturity journey of work force planning approaches from ‘Traditional Work Force Planning’ to ‘Strategic Work Force Planning’. These approaches differ from each other on account of data taken as input, the analysis involved and the outcomes of each.

Table 1 – Workforce Planning approaches Level 1 Traditional Work Force Planning

Feature

Lack consistent methodology for workforce analysis, Lack Technology tool to enhance productivity

Level 2 Work Force analytics

Work force strategy is aligned with business strategy Business Plan

Input

Business Plans by Business Units

Financial Data

Quantitative Employee Data

Quantitative Employee Data

Work Force Gap analysis

Productivity metrics

Outsourcing options

Manpower cost analysis, Total cost of Workforce (TCOW)

Analysis

Internal Deployment/Promotions

Detailed insights regarding workforce, critical skills Output

Headcount projection

Head count Projection Segmentation for talent by business lines

Level 3 Strategic Work Force Planning Identification of critical workforce segments, Identification of Gaps, Employ workforce strategy to close gap, 'What-if' future scenarios Business strategy Multiple Business scenarios and Employee data Directional quantitative Employee data Financial, workforce and other impacts of alternative "what-if" scenarios, Workforce segmentation, Competency mapping Discussion to execute business strategy. Business plans, New Business/territory, Augmentation of facilities, Diversification Decision support tools to choose best options

Discussion with business units for operationalizing work force plan

The organizations can identify their current stage of work force planning approach and move forward to the next level of approach. Strategic Work Force Planning Strategic Workforce Planning (SWP) is an analytic, forecasting and planning process for gauging manpower requirement in the future by taking into account the business strategy of the company and expected changes in the market scenario or environment.

It has a set of procedures which can be used by a company to align the manpower requirement with business strategy and optimize workforce capabilities so that the company’s business strategy could be executed in the future in the best possible way. It integrates workforce supply and demand for the company so that there is right number of people, with the right skills, in the right place, at the right time and at the right cost. Why SWP is needed?  SWP will help in anticipating the future business demand and provide framework to understand future demand scenarios 

Develop understanding of business environment and labor markets affecting core skills



Forecast future talent needs and identify gaps



Forecast knowledge drain due to retirements and resignations



Determine and evaluate likely future sourcing options



Capture Qualitative aspects of workforce



Identify efficiency metrics to enable weighing of alternatives available

Methodology for implementing SWP 1. Horizon scanning Horizon scanning gives insights and an opportunity to consider Economic, Environment and Technological factors, Disruptions and Mergers & Acquisitions while planning for Corporate strategy. 2. Scenario Generation To meet the Corporate strategic objective, business units must formulate business plans. Workforce plan is to be developed basis these business plans.

3.

Workforce demand scenario analysis This analysis is based on the principles of Business Process Re-engineering (BPR).  Pyramid Analysiso

Full Time equivalent (FTE) estimates based on process, technology and time study

o 

Review management hierarchy and span

Productivity metrics o

Identify Business unit wise key productivity drivers

o

Map to internal/external benchmark to identify hotspots

 Organization Structure analysis o

Effective span of control

o

De- layering

o

Removal of redundancy

o

Development of Job descriptions and accountability mapping

o

Proper tooth-to- tail ratio (i.e. Admin office to field manpower ratio)

 Process Analysis o

Eliminate non/low value adding activities

o

Automate transactional activities

o

Identify positions that can be filled by Liquid Workforce, which can be assigned to dynamic project requirements and not for permanent positions thus saving the cost

Based on above principles workforce numbers can be projected in year wise buckets for mid to long term basis the business plans. Till this stage, the quantitative (Headcount) analysis is done.

4. Workforce differentiation analysis This analysis is to identify the Strategic & Critical roles which will have impact on formulation of strategic objectives, Operational roles which are key for executing the strategies and Support roles which will enable the other roles. Competency mapping for these roles needs to be done for identification of skill sets required, measuring skill level of workforce, gap analysis and preparing development plans for critical positions. All positions will be mapped basis identified parameters (e.g. required qualification, Experience, Technical and behavioural competencies). 5. Strategic work force plan Strategic Workforce Plan involves establishing the framework for organization structure, positions and competencies which forms the foundation for effective deployment of manpower. SWP may recommend for redeployment, development, recruitment, reduction or outsourcing of workforce. The outcome of SWP is Work Force plans,

Capability

Development

plans,

Resourcing,

Leadership

Programmes,

Succession planning and Employee career architecture. Implementation of SWP Research has been done on various companies who adopted SWP. It has been found that framework of SWP is not fixed and can be designed according to the requirements of the organization. Successful implementation of SWP has its own set of challenges and most

organizations face similar challenges.

This provides valuable lessons which guide in

implementation of SWP. The lessons are: 

SWP is a concept which, in its essence, should be top driven.



It must be owned by the business and the process should be facilitated by HR.



SWP, being directional in nature, must be reviewed annually.



SWP takes time to be developed and evolve for an organization. Hence, it should be developed gradually.



Initially, implement SWP on pilot basis in select business units and then implement on the organizational level.

Change is the only thing that is constant in the world and rate of change is fast. It is difficult to predict so many variables—particularly related with workforce. Strategic workforce planning offers a pragmatic approach to managing volatility inherent in the future. It is not about predicting a single, “perfect” future. Prescriptive analytics capabilities empower organizations to dive deep into the impacts of possible future scenarios. Strategic workforce planning is an agile approach using simulations, algorithms and human judgement. The focus is to discern optimal solutions to prepare the workforce and the business to respond to the inherent uncertainty of every possible scenario in the future to create competitive advantage.

References: Ross Sparkman, “Strategic Workforce Planning- Developing Optimized Talent Strategies for Future Growth” Becker, Huselid, Ulrich Dave, “The HR Scorecard-Linking People, Strategy and Performance”, Harvard business Review Press Becker, Huselid, Beatty, “The Differentiated Workforce-Transforming Talent into Strategic Impact”, Harvard business Review Press Dan L Ward, Rob Tripp, “Positioned- Strategic Workforce Planning that gets the Right person in the Right job.”

Anurag Chourasia Senior Manager-Manpower Planning Department Hindustan Petroleum Corporation Limited Mumbai