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Effective Workforce Planning – Roundtable Report

Karen Bean, Operations Manager – Gallup
Jackie Bornor, Head of HR – IG Group Holdings plc
Nick Cole, Head of Resourcing – Orange
Mike Emery, International Staffing Operations Programme Manager – Microsoft
Sarah Hopkins, Director – ResourceBank
Obed D. Louuissaint, Director, Human Resources – IBM Global Technology Services
Lara Nicholl, Manager, HRO Strategy & Co-ordination – Ford of Europe
Veronique Pauly, Head of Organisation and Performance – EDF Energy
Katherine Stuart, HR Business Partner – Ricoh Europe Plc
Sharon Williams, Director of HR – Bright Horizons Family Solutions
David Knight, Associate Partner – KPMG LLP (UK)
Ian Lithgow, Partner – KPMG LLP (UK)

Having the right people, with the right skills, in the right place, at the right time – and on budget, against a backdrop of an economy that has forced the retrenchment in workforces, presents a significant challenge. As recovery gathers pace, theHRDIRECTOR roundtable focuses on organisations getting prepared, fit and ready, to meet the present and future needs of the business.

What does an effective strategic workforce planning strategy look like and what is needed to take into consideration and how do you define a core process?

Obed Louuissaint: There’s a couple of elements to that question. What is in a strategic workforce plan? What do you need in the short-term and long-term. You have your demand versus your supply and then you reconcile what the gaps are, then you can start to say we have this unreconciled gap in this particular skill set and here’s what we’re going to need to do in order to get that and then how do you get from point A to point B in 2011. But in 2013, if we don’t have a view of what that is, we’re just going to get there and it’s going to happen to us, and then we’re going to have to think about how do you restructure or how do you lay off, followed by a mad hire. So it’s about employers making sound, long-term predictions, based on some strong analytics and projected demand.

Ian Lithgow: Supply and demand analytics and metrics is very evidence based. Confusion exists between the time frames and time scales that people work to. So when people talk about workforce planning they talk about different time frames. The thing that I personally find really interesting is in the long-term and what will workforce planning really mean. The role of HR in the future will have changed as well as what people’s expectations are from an employment perspective – there may be greater flexibility in what we mean by employment contracts, what does a contract imply? How does that relate to using resources who may be acting more on a consultancy basis?

Nick Cole: I worked for eight years in outsourcing and we were still providing a reactive service, always urgent vacancies that needed filling, and I think, before you start looking at your analytics and technology, for me it’s around the ground rules, around resource planning to start with, so I think we kind of know what the end goal is, you know, right people, right place, right skills, right time. I think there is no single function that can deliver resource planning in isolation so we have multiple streams within HR, be it reward, resourcing, training development. We can’t quite predict new technologies, new products, new service lines, new business opportunities. So we would be reluctant to put anything in place that is so rigid that it would stint or hinder entrepreneurial agility.

Veronique Pauly: I think very good ground rules, and I would add one which might be the first for me, is HR nitty-gritty, the right system in place and good quality in terms of data, to enable you to see the gaps and start working on them.

Sarah, from a recruiter’s point of view, what noises are you hearing from businesses?

Sarah Hopkins: They’ve got the ground rules, but the key is, how to maintain momentum, so line managers understand that this isn’t just something that’s going to come and go. We need to make sure that we can recruit with flexibility, so that the people coming through are the right people for the business now and for the future.

Obed Louuissaint: From a recruitment agency perspective, you’ve almost got a love/hate relationship with workforce-planning because those of us who don’t do it properly, it can translate into good business for agency management, that’s what drives a lot of the short term transactions. Short-term recruitment or hiring for one job, is a result of our poor planning.

Sarah Hopkins: It’s about being given that information so you’re not always on the back foot and being reactive the whole time, it’s a privileged position, as a recruitment partner, to be part of this workforce planning. A key KPI is to reduce turnover, which is to all our benefits – to get the right candidates in the first place.

Sharon Williams: We’re relatively new to workforce planning. It is happening, but it’s happening in different pockets throughout the organisation. I think the key thing for us is actually gain buy-in, from the managers’ perspective and make sure that the business is really clear, and be really focused on the up-skilling for the future.

Mike Emery: At Microsoft, we’ve been running the workforce planning process for a couple of years now and the first year we were downsizing and this year we’re upsizing. I would say that our workforce planning process isn’t particularly strategic. At the moment it’s very much a one year perspective, so we find it very difficult to go beyond a year, because our business is so complicated.

Katherine Stuart: We have gone through M&A so we acquired a number of staff and for the next two or three years, it’s just trying to plan what this is going to look like and exactly what we need over this period. I think the HR business partner model that they have introduced quite recently is for us to be out there and be involved. Looking at workforce planning on a monthly basis, reviewing planning structures, with the core processes and back them up in terms of career planning.

Lara, the motor industry is one of the many hard hit sectors, how has Ford coped with the down-turn, the introduction of the scrappage scheme, and longer term expectations?

Lara Nicholl: The impact for us had the potential to be fairly immediate. We have a low attrition rate, a very high percentage of our workforce are concentrated in the mid career/late career stage. Workforce planning isn’t necessarily an issue for us now, but we know down the line we may have a significant part of the workforce retire. So our challenge will be how we manage to bring a new generation of people into the organisation. We typically look at a five year plan, but we need to be responsive to the automotive markets. Our approach is often to re-evaluated over a shorter period of time where and when required.

Veronique Pauly: EDF is in a growing and changing sector, on every platform. Whether we’re talking engineers and technical people or customer services, we do have very different practices across the business in terms of workforce planning. The nuclear power business is usually planned ahead five to 15 years and obviously loads of assurance around the strategy. Customer service people are more flexible, but there is such a huge skills shortage of engineers in this country that we are pushing to build some programmes to attract young people into engineering careers.

Karen Bean: At Gallup we have learned from experience that hiring ahead of any predicted growth curve, is not a healthy position to be in. With our plans we know exactly where we want to be, and we know that there can be a considerable lead time for recruiting people with the right talents that we need for the roles we have. This allows us to plan, budget and resource more effectively.

Are businesses too busy battening down the hatches to worry about the future?

David Knight: The organisations I speak to are trying to organise their resource planning and more are talking about how they can think differently about their employment proposition, and create a more agile workforce, better deployed and better equipped.

Ian Lithgow: I haven’t seen many organisations make the link between the strategic element that David’s talking about. Take the power generation sector, “what’s the future of power in 2025 or 2030?

An of course the employer/employee relationship is significantly different Nobody sees their employer as their job for life.

Obed Louuissaint: We are heading down a road of different employment arrangements. At IBM, we’ve looked at the next fifty years, what’s our business going to look like in 25 to 50 years from now, and what the workforce look like? We asked individuals early in their career, some who may still be in the workforce during that time period, to get their perspective.

Lara Nicholl: As much as we talk about employer flexibility in terms of offering a portfolio of contracts, I am thinking of future legislation regarding temporary workers.

David Knight: Changing legislation may make things more difficult and we will just have to roll with these requirements as they impact the statute book. If we look back over the last 20 years, most industries go through a boom and bust cycle, where they recruit to the peak of the demand in the market and then by necessity exit a lot of their talent at huge cost to the business.

That is risky and exacts a cost?

Sharon Williams: We made the strategic decision to employ a pool of people, ‘our bank staff’ that can work on a flexible basis to meet the business needs, therefore addressing our peak/low times. Our managers manage two groups of employees our permanent contract staff working core hours (f/t or p/t) and then we have a group of people that come in as and when needed. A diverse and flexible workforce is a win/win; we support our managers and help them manage. It does require more management time: organising rotas, covering holidays, staff meetings etc.

Ian Lithgow: I think that’s an interesting point you know, you mention return on investment, actually helping measure the return on investment of an employee is key. Imagine if you could get a 20 percent increase in return? So what sort of measures are needed and what other aspects need to be put in place from an HR strategy perspective that will actually help increase return on investment?

The long term strategy must be difficult to get right?

Obed Louuissaint: If I pulled out the workforce planning, I have a lot less integrity in the five year element of it than I do in the one that’s going to be next quarter. If you tie yourself to something that you created a while ago then that’s when you get yourself in trouble. Why do we hire ahead? Because if you don’t have the people on the benches ready to be deployed when you sign a contract, you lose the business.

It’s a catch 22, and change is fast in technologies, Nick would you echo that at Orange?

Nick Cole: The pace of change in our sector is continually on the up, and if you take our retail estate, about 750 stores up and down the country, 12-15 heads per store, compared to head office environment, they are two very different entities and challenges. So I think robustness and flexibility of any resource plan framework is crucial, plus getting some good reliable models, processes and technology.

And there’s change brought through change, merger & acquisition etc.

Jackie Bornor: At IG, our resource planning has had to be flexible because we’ve been breaking into markets we weren’t aware of, so certainly Europe we’ve moved into Europe with our new offices, and we’ve started them up from scratch with the emphasis on the new offices purely being sales focused with all support from London. We’ve had to move on that because actually, apart from anything else, you can be too London-centric and the local market does not reflect what is happening in London obviously. We’re knocking on the door of the FTSE 100 and there are a lot of things that go with that, particularly processes and procedures and legislation and all those can be good things.

Christine, obviously there’s alot of change at the BBC. Christine Osgood: The focus is very much on workforce planning. It’s the heart of what we’re looking at now. We have a mixed economy of staff: freelancers, people on fixed term contracts, casuals, agency staff, and so on and we actually thrive on it. We need to work out the resourcing mix for the future.

David Knight: It’s thinking through and weaving a path through that, to actually come up with a set of tools, techniques, methods, connecting with different groups in a business, to make sure that the right decisions are made at the right time, given the pressing needs of the business.

Obed Louuissaint: I wonder if with your focus, you’re going to be able to plan, because you’re highly diversified?

Christine Osgood: It’s interesting because what we have noticed is that there’s a real change in the type of person we’re starting to look for and that’s somebody who can be creative but who can also do general management. In the past, there may have been a view that they didn’t exist – there were people who said ‘I’m creative, I don’t do numbers, I don’t do HR’.

David Knight: It’s areas that we’ve discussed with some of our clients and how they are going to deal with these changes. I think that certainly, from a resourcing perspective temporary workers will continue to form a constituent part of resource plans, moving forward, but I think that the detail isn’t there yet for companies, in relation to how they’re going to deal with it.

And the EU and Government is dropping some pretty impactful incendiary devices.

David Knight: It’s areas that we’ve discussed with some of our clients and how they are going to deal with these changes. I think that certainly from a resourcing perspective, temporary workers will continue to form a constituent part of resource plans moving forward, but I think that the detail isn’t there yet for companies in relation to how they’re going to deal with it.

Nick Cole: I’m interested to see in the next couple of years when the new legislation comes in particularly around temporary workers as to whether that will actually, long term have a negative effect on the economy given that many companies are still in a relatively conservative position, they don’t really want to invest heavily in the workforce, they want to protect themselves against risk.

Ian Lithgow: We’re finding there’s quite a lot of discussion now between Government and works councils to help ensure a country is not perceived as being difficult to operate in. We’re certainly finding that, anecdotally from our location team, there is a softening in position on or around some of the hard approaches.

How impactful is raising retirement age on WP?

Ian Lithgow: Top talent, who see their careers mapped out in their own minds, all of a sudden their career moves are potentially being delayed by a couple of years because somebody decides to carry on working for another two, three or more years because of the retirement age. I think there’s a potential risk that these individuals will say ‘well I’ll move elsewhere’.

Sarah Hopkins: It’s having the transparency on your succession plan. I suppose what we’re seeing is that those individuals who are in the pipeline can maybe take more of a coaching role and can be supported.

Veronique Pauly: The changing in retirement legislation surely brings more uncertainty in our scenarios. One of the programmes that we are building at the moment is called ‘retired but still at work’ which is some kind of part time role to be able to coach and train the newcomers.

Jacki Bornor: I think the Government is contradictory with many of its policies and so many changes have been brought in that actually are at odds with each other. This week it’s been announced about the cessation of the retirement age and that’s got a knock on event to all the benefits, not only pensions but your healthcare plans.

What is the most effective way of aligning HR with line management to deliver a WP strategy?

Christine Osgood: We went out specifically to talk to our Heads of Department about what the future looked like or what even the next 12 months looked like for them, in terms of some big projects, big priorities, trying to bring together our understanding of who we’ve got, the skills they’ve got, the abilities they’ve got, and so looking for opportunities for our talented people, but also trying to match what the business needed. We’ve had a history of going out to consultancies for support when we’ve had projects coming up and one of our commitments to our people was that we’ll not do that, we’ll have a mix.

Veronique Pauly: I believe that workforce planning as much as performance management brings comfort to the manager when it’s well used and I do think that we as HR have a role to play in explaining what it’s all about.

Generally, is the relationship between HR and line management effective, mature enough, aligned correctly?

Sarah Hopkins: I think the HR team quite clearly aligns to workforce planning. What I’m interested in understanding, is how you integrate and get the buy in from the line managers and then check that the integration is actually happening. We need to help line managers understand what the workforce planning is really trying to achieve.

Katherine Stuart: I think with HR professionals now there’s call for the commercial element, to be proactive by getting out to the business and then fully involved from strategic planning with the managers for example and right from there, right from the old defined aspects, then you are able to show how it can actually add value.

Nick Cole: HR partners that are at the more commercial end of HR, perhaps they might not be the most technical HR professional, they might lack some of the subtleties, but those that have come from the business into HR are actually the most successful resource planners by far, they talk the business language so we’ll continue to adopt that as an approach.

Mike Emery: We have workforce planning going on probably in the business and in HR at the same time and we are a heavily matrixed organisation so we have our recruitment function set up at an area or country level and we have businesses that are spanning the whole globe and it’s very difficult for me to understand how to connect global businesses with people a at local level, that actually staff the recruitment function to have that connection to fill the essential workforce plan.

And different countries and cultures will mean different ways of working.

David Knight: I think the common thing that I’m hearing which you’ve reflected on, is that logistically, it’s a bit of a nightmare trying to coordinate across geographic boundaries. I think where we’re seeing a shift is that organisations are now trying to create a framework, and have a set of methodologies and approaches that actually are consistently applied, and you’ve got faith in those people who are actually responsible for local decisions.

Every business will be running lean these days, but that has its shortcomings in WP.

Obed Louuissaint: The process is broken, I was responsible for workforce planning for a business globally but now as the HR leader of a particular segment of the business, I see myself as being responsible for the workforce plan. We will continue to operate at some level of under capacity, variations of it. It’s about supporting overall strategy around whether it be flexibility or performance.

What delivers better control, consolidated or devolved control centres?

Lara Nicholl: One of the core things we have talked about today is the need to align workforce strategy with the business strategy and what has helped us particularly in Ford through the recession period is, Ford’s business strategy and future vision. Our focus has shifted more towards working as global skills teams, rather than local business regions. And as the business strategy has become global so has HR.

Ian Lithgow: I think it depends on the organisation structure, and level of control; for example is the organisation very centrally controlled, command and control driven, or is it a devolved model? If devolved how do we drive consistency and common approaches to workforce planning, as well as common guiding principles in a company, where business units can largely operate on their own and do their own thing? What’s in it for them to change? I think it’s about how do you sell the benefits of consistency and have some common approaches.

Sharon, you’re in a sector where immediate needs are required, flash points come that much faster and quicker in that situation. How do you handle it?

Sharon Williams: We want to create an environment where our staff feel empowered to make decisions. Centralising everything or trying to control everything from our perspective doesn’t work. We have developed a framework of policies and procedures, the foundations for our managers to operate within, having moved away from command and control to a more systems thinking approach.

Katherine Stewart: I think this is where it’s really important that the leadership, as its leaders are actually aligned, because I think if you can have alignment, even if you are working globally, it’s still decentralising. I think it’s where the strong leadership alignment needs to support it.

Veronique Pauly: EDF is a patchwork of business units, and I am pushing on the subject, that workforce planning could also be a tool to make us one company.

Obed Louuissaint: A couple of years ago we used to go by a term, I don’t think we coined it, a lot of people used it, is ‘glocal’. global policy and guidelines, but the execution is local – you’ve got a set of standards and then when it’s implemented, you implement it in the way that makes sense locally.

Lara Nicoll: Isn’t there a challenge sometimes between acting at a local level and managing people globally, if you have regional HR processes?

Obed Louuissaint: What makes absolute sense in New York, may make absolutely no sense across Europe. So there’s some policies may be so difficult to implement in the rest of the world, you just don’t do them globally.

Is there a danger of a localised, cavy attitude?

Obed Louuissaint: Once you determine what’s core to you, then it determines what is going to be standard globally.

How do you analyse how effective your WP strategies have been?

Mike Emery: We do quarterly business reviews with the staffing teams in each of the time zones and we actually bring out those numbers and we have conversation around the reality versus what was actually planned originally. In terms of the numbers and skills, we try and learn what we could do better for the next time. So I’d say regular review processes is one of the things that we’re implementing at the moment.

What about actually drawing the strands together and making sure that there’s no drift?

Mike Emery: Just having the conversation between the various key components of the workforce plan, we’re able to address those sort of issues, so for me the business review and actually having those key players constantly involved during the year is the way that we are trying to address that.

Nick Cole: I think for me the ultimate measure of success of workforce planning is business performance. If you go back to the definition which we had said right at the very start, it’s right people, right place, right time, right skills. But for me that’s just missing the bit at the end which is to enable the business to deliver its strategy.

David Knight: Organisations are stretched to make the numbers work through the downturn. The danger of course is that whilst the numbers may add up, there is a danger that the service quality begins to fall.

Do you think businesses are too focused on the economy and will ultimately pay the price when things improve?

Ian Lithgow: They look at a number of factors; external environment, demographics, legal issues, environmental issues, sustainability issues and political issues, and this gets into a strategic piece around the planning. We will always get the catastrophic events such as the recession, but you know, people and organisations have weathered it so far, and the economy is moving forward.

David Knight: Headcount reduction of permanent employees is invariably followed by increases in outsourcing, contractors and temps.

Jackie Bornor: But that is what effective planning is all about, not going up and down on the headcount. Your numbers should stay fairly steady.

Do you think there needs to be more legislation that penalises businesses for reckless hiring?

Obed Louuissaint: Some countries have done it.

Nick Cole: Any headline that says “10,000 redundancies” with the advent of social and media networking and so forth, the damage to your employer brand has a massive, long term knock-on impact on your future resource plan, because you’re not going to be able to attract talent. I think the world’s ultimately a relatively fair place and what goes around comes around.

So where do businesses get it so wrong, where are the chinks in the armour?

David Knight: I think generally, a lot of line managers are ill equipped to critically evaluate and forecast their resource requirements. Training and development investments can often be a small proportion of the total investment in the workforce. So I think that there’s an awful lot more that we can do as HR professionals to equip our line managers with the tools, the techniques and the capability, to be able to do this work well.

Karen Bean: An engaged workforce, can be indicative of how a business is performing and can be incredibly powerful when linked in with customer engagement measures. Where would a business be without its employees and customers? Success is not only measured by revenue and profit, but also by whether you are retaining the right employees and clients, and if they are looking to develop and grow with you.

Jackie Bornor: How many times have we heard managers saying ‘my hands are tied’ with regard to headcount… actually I’d like two more junior people, or three more junior people for the price of a senior, but actually I’ve been told ‘I have to keep within the headcount rather than within a budget, rather than actually a mixture of both. I think it shouldn’t just be a number – it should be “right, this is my business plan, this is how I plan to achieve it”.

Ian Lithgow: There is no magic bullet to workforce planning. Everybody is really tussling with the difficulties between organisation structure, competence and capability within the business and line management. Actually, what does workforce planning really mean, what are the tools and techniques we need to put in place, how do we measure the return on productivity of workforce planning, how can we effectively scenario plan. For me it’s whoever comes up with identifying and delivering effectively this solution is delivering the magic bullet. I think whomever does this would probably end up being a very wealthy person and maybe that’s something I should think about over the weekend! However, I can see that actually, it’s probably going to get harder to deliver workforce planning, as the environment and the economy in the world seems to get faster and faster and things are changing more quickly.

David Knight: I think that the very fact that we are here talking about resource planning, as HR professionals, is a positive step forward. This is a complex area and I think we need to deal with this challenge in bite-sized pieces. For me, the first key step is to create a framework for managers and HR, in order for people to operate to similar principles, using their local knowledge to get their plans completed consistently well, accepting that you’re never going to predict accurately what the market is going to throw at you. So this whole piece around agility of workforce, I think, is my final comment to the debate, that’s where a lot of organisations are spending their time. Clearly we need to be more agile and flexible to actually deploy our resources, now and for the future.

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