In a recent post we talked about the importance of creating an agile talent management strategy in a new global talent age. The ever-shrinking cost of cloud, mobile and social technologies, and access to a global pool of skills is quickly shifting the game from outspending competitors, to outmaneuvering them – and an agile talent management strategy is key putting the right talent in the right place at the right time.
However, even the most agile talent strategy needs an action plan (or a set of plans) in order to prioritize activities, define the blocking and tackling initiatives, and track effectiveness. To create talent plans that can respond to an agile talent strategy, the notion of annual workforce planning must be replaced by a more iterative approach that helps the organization identify and fill gaps in their talent supply and demand, as business plans change throughout the year.
By most accounts, traditional workforce planning is viewed a rudimentary process, typically owned by HR or Finance, whereby headcount and compensation & benefits data (e.g., turnover, loaded salary costs, etc.) is utilized to plan for future labor expenditures. While this has been an adequate exercise to meet the baseline skill needs of the organization, the main value of traditional workforce planning is cost control. Managers know they must operate within the constraints of their headcount budget, regardless of shifting business need, and it isn’t likely company policy encourages replacing employees based on changes in business priorities.
As an HR leader, your challenge is to anticipate changes in the business and respond by delivering the right skills in the shortest time possible. This requires new levels of collaboration with business leaders and a new approach to creating a strategic “talent plan.”
Creating a talent plan is not just an exercise for HR. It is an undertaking that reaches across the entire business, and like other multi-disciplinary programs it needs direction and support from senior leadership to drive enterprise-wide adoption and participation. A successful talent planning effort is often co-sponsored, co-developed and executed by HR, IT and business leaders working together.
However, the ability to manage such a wide-reaching program is not typically in the sweet spot of the average HR practitioner. Creating a holistic talent plan requires someone who is highly analytical, yet understands the functional aspects of HR and possesses a deep understanding of today’s technology capabilities, along with what it will take to fundamentally change the way people work. If that sounds like an impossible role for any one person to play, it is. This is why collaboration between HR, IT and business leaders is critical in order to create and execute a highly responsive talent plan.
Creating your talent plan means taking an approach that focuses on the organizational goals as the primary driver, and then developing actionable talent management roadmaps and HCM technology blueprints that account for both available talent supply and future talent demand. Finally, to ensure your plan doesn’t fall out of alignment with the business, it is critical that talent planning become an integral part of agile business planning, and that revised talent plans are created quarterly, at a minimum.
Step 1: Assess Talent Demand
The first step is to meet with senior business leaders to understand the organization’s short- and long-term business plans and objectives. As an HR leader, the outcome of these engagements should be a clear understanding of the goals of the business, and what talent will be needed to meet those objectives (e.g., workforce drivers, KPI’s, job profiles, etc.).
Understanding exactly how each job/role contributes to the defined business objectives allows HR to identify the most strategic and critical roles in driving success.
These roles can then be segmented, or categorized in ways that help prioritize functional action plans. For example:
- Create competitive advantage
- Related to generation of sales, revenue, product development and/or service delivery
- Significant organizational risk to top-line performance if not filled with top talent
- Directly related to operational excellence
- Related to fulfillment, purchasing, and/or customer support
- Some organizational risk in terms of top- or bottom-line performance if not filled with the right talent
- Valuable and required to sustain day-to-day operations
- Focused on transactional, process, and/or administrative support work
- Short-term and/or isolated organizational risk if not filled with right talent
- Limited or low value to the organization’s operations
- Jobs can be easily redeployed or outsourced; people should be retrained, reassigned, or eliminated
- No organizational risk if not fulfilled with the right talent
Step 2: Assess Talent Supply
Assessing talent supply starts with environmental scanning to understand both the internal and external talent supply. Internal talent supply refers to the organization’s own capabilities, while external supply refers to full-time workers, part-time workers, and contingent staff available outside the organization. Keep in mind, talent can now be crowdsourced from places like CloudSpokes or BarrelofJobs for example. Many organizations are also beginning to leverage their employees’ vast personal networks to identify possible candidates, as well.
External data can often come from candidate databases, as well as information gathered on the competition’s workforce (LinkedIn, for example), labor reports & forecasts, graduation trends, and even monitoring social networks for clues about an individual’s interests, skills and expertise.
Once you have a firm understanding of what talent you need (demand) and what talent is available to you both inside and outside the organization (supply) you’re ready to begin building your talent plan.
Step 3: Build the Talent Plan
Through analysis, a clear picture of the gap between the organizational demand and required supply of talent should emerge. By evaluating this gap, you can begin to formulate and develop future state models that predict the various options available to address, and ultimately close, the gap.
This part of the process is all about predicting the future direction of the organization. As such, it should involve key stakeholders in the development, review, and validation of the plan. Developing these future state models can be accomplished by employing different planning approaches, including; Predicting, Scenario Planning, No Change Future State, and Targeted Future.
Predicting is a method of determining the organization’s desired future state. This by no means is an exact science; however, it is critical that predictions align with the strategic direction of the organization.
Predictive Modeling uses quantitative and qualitative data to help develop ‘what-if’ scenarios to predict possible outcomes. For example, if we were to invest $1 million more in performance-based incentives and new hire training, what might our gains in productivity be?
Scenario Planning can be more easily defined as “being a head of the curve.” This technique is used to determine what will happen next. The focus of scenario planning is to provide time for an organization to react, change and adjust its workforce in order to be prepared for possible “what-if” futures.
No Change Future State is an approach used to highlight certain workforce risks, (e.g. aging workforce, competency gaps, lack of specific skilled employee, etc.). The goal of the No Change Future State is to “predict” the impact on the organization’s ability to execute it business strategy if changes do not occur.
Targeted Future State is simply the selection of the desired future state based on the scenario plan. However, prior to selecting this targeted future state, ensure that is aligns with the organizational strategy and direction.
Step 4: Create Functional Talent Management Action Plans
The creation or iteration of your talent plan does not mark the end of the process. In many ways, it is just the beginning. Once the strategic talent plan has been developed, HR is responsible for making the plan actionable. Specifically, Centers of Excellence in Talent Management (e.g., Staffing, Learning & Development, and Compensation) must get involved at this stage to develop integrated talent management action plans for their respective functions that meet the workforce demands of the organization by ensuring the right supply of talent (through acquisition, development, crowdsourcing, etc).
How You Will Know When You’ve Gotten it Right
Strategic talent planning doesn’t end when a binder with a “plan” in it gets put on the shelf. The specific achievements and outcomes of the plan, not the plan itself, drive transactional HR activities. Examples of this include:
- Determining how, where, when recruiting is done
- Migrating away from limiting legacy technology
- Changing organizational structures based on future business needs
- Modifying leadership development and top talent programs
Ultimately your talent plan must deliver top- and bottom-line results that demonstrate the impact and effectiveness of the organization’s investments in HR and HCM technology, as well as justify why YOU should fill that “seat at the table.”
In the weeks ahead we’ll be addressing each area of the employee lifecycle, offering strategic advice and highlighting the latest in cloud, mobile and social technology to help you to reimagine ways to do just that!