Strategic Workforce Planning: Why Now?
“But why do we need to look at the future? That won’t solve my current problem."
The reality is that organizations have never had more to juggle – from an internal perspective (transformation, digitization, growth, consolidation, change); an external perspective (external shocks, pandemics, political volatility, economic uncertainty); and workforce perspective (skills, hybrid work, demographics, DEI).
It is time to move beyond the 20% blanket workforce reductions, hiring freezes and reactive org restructures that we have been living through for decades and do things differently. We can do better. In the following video, I'll show you why a short-term view won't cut it any longer. Prefer to read? Jump to the transcript below.
Transcription has been lightly edited for clarity.
Why should I commit to Strategic Workforce Planning now?
Something we always get asked is why do we need to do this longer-term strategic planning. We have urgent problems today that we are dealing with: putting out fires; a thousand open roles. We have to hire for whatever it is. Your thing called Strategic Workforce planning (SWP) that looks at one to two or five years isn't going to fix those problems for me.
I always say, well, imagine that you knew a year ago that you would be having this problem that you need to solve today. Could you have done things differently? Could you have prepared better? This is not about predicting the future with 100% certainty. This is about lifting the gaze and looking forward. Those that have those urgent problems that never step up and out of that tempo will find themselves in the exact same place this time next year and the year after that. After all, how do you think they got there today? This is about trying to have a plan for the future so that we can ensure we have one. Only by stepping out of that cycle and creating a strategic plan for the future of your workforce can you truly stop that reactivity.
What are the reactive decisions impeding future growth without Strategic Workforce Planning?
Consider the hiring freeze that impedes customer delivery or the 20% across the board workforce cuts that remove those skills that are actually critical for your transformation age. Under those reactive org restructures, those short-term knee jerk panic button decisions destroy culture, engagement, productivity and the organization's long-term chances of success.
What about my current hiring plan?
Many organizations have a twelve month view. They are working with a budget or recruitment plan, or they may want to implement Strategic Workforce Planning, thinking it will solve their latest problem of the day. So why do we need to look longer term?
Let's say we have an immediate uptick in customer activity. Due to COVID, there is an initial spike of customer queries causing short term pain. “We need additional resources, and we need them now,” the business screams. Cue panic. The HR team, without any alternative view, goes out and starts hiring that new level. Which by the way becomes the ongoing level, at least until we have some other reactive shift. What I mean by that is that the increased level is the new hiring plan. As someone leaves, we backfill into that and the MO for most organizations is that because they don't have a longer term view, they hire permanent FTE.
How would Strategic Workforce Planning improve our ability to respond to short-term increased customer demand?
If we had the view of the activity drivers of those customer queries through scenario planning and demand forecasting, we're able to learn that this may be a short-term spike which could reset within twelve months, and now we need to work out what we need to do.
So, we've got this oversupply as we look at other things that are going on within the organization. Say a transformation driver of a digital channel shift that the organization was planning kicks in after twelve months and progressively needs less of these resources as customer interactions go digital. We see that we have a bigger problem. We are carrying way too many resources that we need to work out. The traditional MO for most organizations is that they let go of these. We may be able to reskill those resources somewhere else in the organization, but we need that holistic view of the future to know how we can do that. Reskilling doesn't just happen overnight.
This can also happen in the opposite direction. one that many orgs have faced at one time or the other where things may take a hit, a downturn relating to an external shock such as a global pandemic, GFC, or looming recession.
Let's say the organization has that twelve month budget view, but the question then becomes what could the future look like so that you can make the right decisions for commercial viability and sustainability but to do the right thing by your people too. Would things bounce back quickly and restore to pre-existing levels? We have to understand and model the impact of external shocks and internal forces on the organization and its people through strategic workforce planning and demand forecasting and scenario planning so that you can always have the most appropriate strategies and action plans in place to navigate through and emerge in the most effective way.
How will strategic workforce planning improve my chances of success?
Having these projected views of the future enables a different level of conversation for your organization in linking the business drivers to the workforce through strategic workforce planning. We can make sure the organization makes those better decisions, and it moves away from those short term decisions that destroy the longer term viability which is what would have happened in that previous scenario.
And indeed this has happened to many organizations. They see that short term dip, react quickly and cut. We need to be able to look to the future and understand potential outcomes and see the impact that different trajectories and different activity drivers have on the workforce.
And that is why in these times there's so much change, so much uncertainty, so many moving forces internally and externally. Strategic Workforce Planning is about trying to have a plan for the future so that we can ensure that we all indeed do have one.