Strategic Workforce Planning
Aligning Talent and Strategy
Presented by:
Jill Lackey
Allegacy Consulting Group
Carolina Credit Union League
HR and Professional Development Conference
October 23, 2014
What is Strategic Workforce Planning?
• Strategic workforce planning (SWP) is the analytic,
forecasting, and planning process that connects and directs
talent management activities to ensure an organization has
the right people in the right places at the right time and at the
right price to execute its business strategy
• Strategic workforce planning (SWP) is a critical business
initiative and not a human resources activity
Strategic (or long-range) planning = long-range planning for the
business
Strategic workforce planning = long-range planning for talent
Organizational Development:
Strategic Workforce Planning
Organizational
Development
Change
Management
Organizational
Design
and
Structure
Performance
Management
Strategic Workforce
Planning
(SWP)
High Potential
Employees
(HIPO)
Cultural Initiatives
Succession
Planning
Leadership &
Career
Development
Two Types of Workforce Planning
• Operational workforce planning – focuses on
skills and capabilities needed within the next 6 to
18 months.
• Strategic workforce planning – looks 3 – 5 years in
the future and anticipates new skills, roles and
situations that might not exist today. Deals with
variables that cannot be predicted but can be
prepared for.
The Business Case for Strategic Workforce
Planning
Each year, The Conference Board conducts a
survey of CEOs, presidents, and chairmen from
more than 1,000 companies around the world.
The executives are asked to identify and rank
the most pressing challenges they face. For the
second year in a row, Human Capital — how
best to develop, engage, manage, and retain
talent — was named the leading challenge
among ten choices.
The Business Case for Strategic Workforce
Planning
The strategies these CEOs plan to implement to address their concerns
include:
– Provide employee training and development.
– Raise employee engagement.
– Improve performance management processes and accountability.
– Increase efforts to retain critical talent.
– Improve leadership development programs.
– Focus on internally developed talent to fill key roles.
– Enhance effectiveness of the senior management team.
– Improve effectiveness of front-line supervisors and managers.
– Improve corporate brand and employee value propositions to attract
talent.
– Improve succession planning for current and future need
The Business Case for Strategic Workforce
Planning
• A 2014 survey conducted by pwc states “As US
companies return to growth mode, anxiety over skills
needs intensifies: 70% of US business leaders are
concerned about the availability of key skills, a sharp
increase over 54% that said so in 2013. Demand for
highly valued skills is strong; the “war for talent” is as
fierce as ever. Thus addressing the skills shortage is about
much more than hiring fresh talent. It means taking a
fresh look at the talent within. Businesses that have been
able to build up intellectual capital by continuously
cultivating the next generation can experience a distinct
advantage”.
The Business Case for Strategic Workforce
Planning
• Aging workforce and approaching retirement wave
– By 2020, 25% of the labor force will be age 55+, up from 12% in 1990.
– In 2014, the annual growth rate of the overall labor force will shift
• 55-and-older = 4.1 % (4 times the rate of growth of the overall labor force)
• 25-to-54-year = 0.3 percent
• 16-to-24-year-olds - essentially flat
• Projected labor shortages
– By 2018, with no change in current labor force participation rate or
immigration rates and an expected return to healthy economic
growth, we will have more jobs than people to fill them.
• Anywhere from 5.0 million to 5.7 million potential jobs vacant
– If the full employment gap is not filled, using Congressional Budget
Office data, estimate the loss in total output as high as $3 trillion
across a 5-year period beginning in 2018
The Business Case for Strategic Workforce
Planning
Projected Leadership Shortage
In numerous surveys, senior executives are expressing
concerns that stiffening competition for exceptional
individuals is curtailing plans for progress.
– The Corporate Executive Board reports that 60% of
organizations feel constrained by the leadership shortage
– The Bersin Deloitte Advisory Board cites the need to develop
organizational leadership capacity as one of the three
biggest business challenges companies face today.
– Bloomberg also rated leadership development among the
top issues confronting HR professionals
– Industry Week Magazine called the lack of potential leaders
the most pressing human capital problem of our time
Strategic Workforce Planning Model
Business Strategy
Monitor and
Reporting
Segment Roles
Action
Planning
Environmental
Scan
Future State
Analysis
Gap Analysis
Current State
Analysis
Align to Business Strategy
• Analyze the long-range plan to identify impact
to talent
– What new core competencies emerge?
– What organizational structure will best meet your
future needs?
– What systems and tools will be needed?
– What are the cultural implications?
– How will staffing needs change?
Align to Business Strategy
Strategic Imperative: Implement business
intelligence tools that drive performance to
ensure long-term stability
– Do you have the right technology people to
identify, implement, maximize and continually
evolve the use of these tools?
– What impact will this have on the need for skills or
competencies for users of this new data?– (how to
analyze, systemic thinking, flexibility, change
readiness)
Align to Business Strategy
Strategic Imperative: Become an employer of
choice
Criteria for top 100 workplaces is based on trust and culture
•
•
•
•
How will this impact what you look for in leaders?
How will you shift the mindset of current leadership?
What training is needed?
How does this impact your succession planning criteria for
promotable potential?
• How will you measure and evaluate this?
Role Segmentation
Impact
Roles that drive the strategy
Roles that support the strategy
Roles impacted by the strategy
Talent Segment
Investments Over Time
Strategic
Critical to driving long-term
competitive advantage, with
specialized skills or knowledge
Strengthen, retain and ensure
succession plans are in place.
10 – 15%
Core
The “Engine of the Enterprise,”
unique to the company and core
to delivering on its products
and/or services
Protect and Develop
20 – 30%
Requisite
Cannot do without, but whose
value could be delivered through
alternative staffing strategies
(other than full-time headcount)
Streamline, Outsource and
Maintain
60 – 70%
Misaligned
Talent whose skill sets no longer
align with the company’s
strategic direction
Redeploy or retrain
As few as possible
Environmental Scan
• External – Economic and regulatory
• External – Labor market supply (external supply of candidates,
employment brand, competition, recruiting sources like
colleges, trade associations, etc.)
• Internal – Organizational factors (long-range strategy, business
plans, resource allocation, budgetary constraints, culture).
Environmental Scan
External
Economic and
regulatory
1. What regulatory changes are
anticipated between now and 2018?
Do we have the right skills and
competencies to respond?
2. How will the economic forecast
impact our staffing needs in terms of
skills, numbers and timing (e.g.
improving housing market = > need
for mortgage lenders, increase in
capital spending = > commercial
lending)
3. What are the impacts to talent from
the “disrupters” in technology?
GDP Forecast (QTR)
3.0
3.0
2.8
2.6
2.6
2.4
2.4
2.2
2.2
Q4 2013 Q1 2014Q2 2014 Q3 2014Q4 2014
10 Year Note Forecast
3.24
3.52
3.77
GDP Forecast (YR)
3.2
2.8
4.01
External Environment
Economic Forecast
4.19
YR 2013
YR 2014
YR 2015
YR 2016
Federal Funds Rate Forecast
4.41
CPI Forecast
2.5
2.0
1.35
1.5
1.68
1.90
2.08
2.17
2.30
2.32
1.0
0.5
0.0
June
2014
Dec
2014
June
2015
Dec
2015
June
2016
Dec
2016
June Dec June Dec June Dec
2014 2014 2015 2015 2016 2016
Unemployment Forecast
7.0
6.5
6.0
5.5
5.0
4.5
Forecasted Housing Starts
(Millions)
0.92
June Dec June Dec June Dec
2014 2014 2015 2015 2016 2016
Source: WSJ January Consensus Forecast
Dec June Dec June Dec June Dec
2013 2014 2014 2015 2015 2016 2016
2013
1.11
2014
18
●
●
●
●
●
Taxation
Risk-Based Capital
Secondary Capital
Business Lending
Data Breaches/”Target”
Incident
● Mortgage Regulations
(QM)
● CFPB
● Definition of ERM
External Environment
Key Regulatory Agenda Items for Credit Unions
19
Environmental Scan
External
1. What is projected employment
Labor market supply
rate within footprint? How does
(external supply of
this impact growth plans?
candidates, employment 2. What colleges offer the skills you
brand, Competition,
will need in the future and how
recruiting sources like
can you start building
colleges, trade
relationships now?
associations, etc.)
3. What “employment brand” will
attract millennials? How do you
need to change to support that
brand?
County
External Environment
Unemployment Trends
Unemployment Rate
Mecklenburg, NC
6.7%
Forsyth, NC
6.1%
21
Source: BLS.gov; Data reported for December 2013
Environmental Scan
Internal
Organizational factors
(long-range strategy,
business plans,
resource allocation,
budgetary constraints,
culture).
1. What is projected membership growth ? how
many employees will be needed? Where? How
many Branches? What percentage of members
will use FCs, mobile, CC, web?
2. What new technical skills are needed to
support LRP?
3. What products or services will be used to drive
projected growth each year and do we have the
talent to support them? (e.g. lending growth –
mortgage? Retail? Equal?)
4. What delivery channels anticipate the greatest
growth, when and how? Do we have the talent
to support?
5. What is the impact to organizational structure,
and staffing gaps, and/or surplus?
6. What training will need to be provided, when
and for whom in order to prepare staff?
Future State Analysis
Future State Analysis – a framework for having a strategic discussion about
future possibilities in order to identify future talent needs.
Strong economy – adequate talent
supply vs. inadequate talent supply
Impact – compensation pressures, buy
vs grow, college recruitment,
alternative sources
Member demographics and
expectations
Employee demographics and
expectations
Impact – technology skills, behavioral
competencies
Impact – attraction, retention,
development and engagement
Impact of technology
Impact – Resources, skills, alternative
sources, organizational structure –
centralized or decentralized?
Current State Analysis
Current State Analysis – Detailed analysis of current capability
and capacity.
Gather employee data by function:
 Employment status
 Location
 Demographics
 Competencies and skills
 Diversity criteria
 Compensation data
 Tenure
 Retirement eligibility
 Performance ratings
 Potential
 Engagement scores
 Status of successors
Analyze employee reports
for gaps, vulnerabilities,
opportunities and
engagement level. What is
the impact?
Gap Analysis
• Compare current state to future state for
EACH role
– Role segmentation
– Headcount needs
– Skills and competencies
– Experience and education
– Behavioral characteristics
– Level of engagement
Gap Analysis
Position:
Gap Dimension
Role segmentation
Headcount requirements
Vulnerable positions (retirements,
transfers, resignations, performance
issues)
Engagement level
Retention risk (qualitative not
quantitative)
Bench strength or availability
Technical/business skills
Behavioral characteristics/other
competencies
Experience and education
Current State
Future State
Gap
Action Planning
•
•
•
•
•
•
•
•
•
•
Organizational structure design
Job redesign
Attraction and acquisition plan (recruitment strategies)
Outsourcing options
Redeployment needs or retooling plan
Performance management
Succession planning
Learning and development plans
Total rewards strategy
Retention and engagement strategy
Position: Branch Manager
Gap Dimension
Role segmentation
Headcount requirements
Current State
Future State
Gap
Supporting
Core
15
23
Need to be more strategic;
increase impact to operating
excellence and revenue
8
Vulnerable positions (retirements,
transfers, resignations, performance
issues)
Engagement level
(Based on Denison Organizational
Culture Survey)
3 Mgrs & 1 Asst. Mgr – 60 yrs. +; 6 Mgrs & 2 Asst Mgr – 60 yrs.
2 open positions
Be prepared for departure of
up to 8 managers by 2018
Empowerment = 68%
Vision = 88th
Cap Development = 37th
Empowerment > 75%
Vision > 75th
Cap Development > 50th
Increase scores by:
Empowerment: 7 %ile
Capability Development: 13%
Retention risk (qualitative not
quantitative)
Competitive field for
recruitment; average days to fill
= 80
0 AM ready for promotion wi
next 12 mths
Two plus years consumer
lending exp.
Sales focus, strong
interpersonal, leadership, oral
and written communication
skills
Need to define a clear career
path for Branch Managers
Three or more years related
experience in financial
institution branch
Bachelor’s degree and/or
equivalent experience in
financial institution; customer
service mgmt. experience
Create formal Mgr. training
Program for Asst Managers;
Career Development coaching
Hire Asst Mgrs with skills and
potential for advancement
Change recruiting criteria
Create technical training
Change recruiting criteria
Create training modules on
these topics;
Provide mentors
Identify developmental
assignments
Change recruiting criteria
Promote education
reimbursement program
Bench strength or availability
Technical/business skills
Behavioral characteristics/other
competencies
Experience and education
2 or > AM ready for promotion
within next 6 months
Data Analytics
Technologically savvy
Inspirational leader
Systems thinking
Intellectual curiosity
Risk-taker
Monitor and Report
• Establish metrics
• Create quarterly reporting and accountability
procedures
• Schedule quarterly SWP review meetings
Keys to Making Strategic Workforce
Planning… Strategic
• Driven by business strategy and objectives
• Executive team’s commitment to making SWP a
priority so it is proactive vs. reactive
• Accurate and objective segmenting of the workforce
• Consistent and sustained process and approach
• Readily accessible analytics
• Executive team’s capability to lead change
Supporting Infrastructure
•
•
•
•
Superior communication strategy
Enterprise-wide project management
Technology
Teamwork and collaboration