A very VUCA world…

My first HR role was “Manpower Planning Manager” for a well-known building society.

My first HR role was “Manpower Planning Manager” for a well-known building society. First impressions count and I am as influenced today as I was then, by the lessons I learned about strategic workforce planning. Robert Bolton, Partner and HR specialist at KPMG.

I recall I was encouraged to visualise the workforce as a dynamic model – sometimes referred to as “drawing the manpower system” – it involved identifying the numbers of employees at each level and then correlating the rates of turnover, recruitment and promotion that occurred at each of these levels. The purpose was to understand how people joined, flowed through and left the organisation. For me, the manpower system could be modelled and used with different scenarios to predict, for example, the number of graduate recruits needed in any given year to fulfil branch requirements 3-5 years later. What struck me then was the power of creating a visual and computer-based model to bring insight and evidence into decision-making. Understanding a few of the dynamics at work such as turnover, age, length of service, rates of promotion helped the organisation appreciate the characteristics of the workforce system and link these to the business agenda so that a sense of the gaps between supply of and demand for people could be understood and planned for.

But in those days most jobs in building societies were full-time, meaning that the planning environment was fairly predictable and benign. Today, of course, we live in a world characterised by VUCA: volatility, uncertainty, complexity and ambiguity. Workforces are more diverse in terms of employee and contract type; organisations do not necessarily directly manage all of their value chain and flexible working adds to the overall complexity. Moreover, with increasing levels of employee disengagement reported and with the recession in western economies continuing, some would argue that a crystal ball is vital to accurately predict what level of turnover might be accurate for planning purposes.

So what can the beleaguered HR Director do? Firstly, it’s worth being clear about terms. After all, one person’s workforce planning is another person’s workforce analytics. Rather than allow the confusion to persist, it’s important to communicate to your business whether you are focusing on critical roles, the whole workforce, future need, or the immediate situation. Making this clear will determine the data you use. There is also huge complexity to deal, with given the VUCA challenges facing many organisations. Predicting workforce supply and demand over longer term timescales requires many more variables to be considered than those that applied when I was a humble Manpower Planning Manager. Modelling techniques have advanced considerably and what can now be achieved through better management of data is a world away from what was possible in workforce modelling packages from last century! That said, experience tells us that trying to take account of and model every possible variable is probably inappropriate unless one is simply trying to understand macro imbalances relating to supply and demand.

What is more useful is to understand the workforce systems as they apply to key or critical roles in the business. Certainly, clients are beginning to realise that, rather than try to model the entire workforce in one go, it is much more effective to minimise complexity by looking at the few roles that drive most value in your business. An oil company, for example, will be better focusing on those involved in exploration, such as geologists. For a hotel chain it is likely to be those who identify and develop new sites. That’s why analysis is important. Strategic Workforce Planning only works with insightful workforce analytics that focus on current and required capability. You also need to combine the hard numbers with softer qualitative data from engagement, social media and performance management sources because doing so helps you to gain an insight into the dynamics of the workforce. It is also a good starting point for scenario planning and, of course, understanding the supply side of the equation.

One final aspect to consider is to draw on the “wisdom of crowds” or, more precisely, the wisdom of you r employees. There are some exciting new tools available to help leaders engage with their workforces on a more dynamic and real time basis. Sometimes referred to as “crowdsourcing”, one technology organisation I spoke to recently sought employee views on the labour market and numbers of graduates that the organisation should recruit and the employee judgements were spot-on in reality. In short, to be effective it is important that strategic workforce planning is not just a ‘dry numbers’ activity. To be valuable in the VUCA world we find ourselves in, organisations need to fight dynamic complexity and uncertainty with some dynamic actions themselves. They should be focusing on the roles that drive value, or are critical. They should synthesise the different sources of available data to create a more predictive and insightful view. Above all, they should not be acting in isolation. True success will only come if the exercise is open and involves the input of engaged employees. www.kpmg.co.uk

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