If there’s one lesson companies can take from 2020, it’s this: It’s essential to have an agile and flexible workforce that can respond quickly as circumstances change.
Many organizations, however, lack the data and capabilities they need to quickly assess and deploy talent, let alone the ability to forecast, scenario plan or analyze how their workforce needs to evolve in order to grow the business.
One solution: Build an analytics-driven workforce strategy capability within your business.
Gone are the days when workforce strategy was mainly about headcount or cost efficiency planning, mainly taking place during the regular budget and forecast process.
Today, workforce needs are incredibly complex. There’s an intensifying war for talent. Although the C-suite has shown they are optimistic about the future, the vast majority of CEOs worry about a lack of key skills among their employees. Hybrid work has become the norm and the gig economy is here to stay.
A static, yearly or quarterly process isn’t enough to keep up anymore. Today, leaders need the ability to make analytics-driven decisions, plan for what-if scenarios and analyze how their workforce needs to evolve as technology and the market changes. Yet 68% of organizations do not consistently take a strategic, scenario-based approach to workforce plans.
In short, workforce strategy has to evolve. What’s more, it should happen throughout the year as needed, not just as part of the annual or quarterly budgeting processes. And it needs to be collaborative. Workforce strategy spans every department, including technology, finance and tax. It requires a firmwide commitment and directive, from the C-suite to people managers.
Many organizations can lack an integrated workforce strategy capability. Instead, planning is fragmented across the organization with, for instance, HR tackling talent while real estate scouts locations. According to a March 2021 PwC survey, only 9% of organizations are ranked as ‘leading’ in their approach to aligning workforce strategy with their talent strategy and practices.
It’s time for an integrated and coherent workforce strategy—one rooted in analytics, scenario planning and short-, medium- and long-term forecasting.
The advantages of strategic workforce planning are significant, not just for the business but also for your employees. They include:
Develop agility and flexibility so you can more easily move people around—meeting the increased employee desire for remote work—and better respond to situations like supply chain disruptions, changes in immigration policy and, yes, global pandemics.
Improve budgeting through clearer insight into the headcount you need now and in the future.
Create efficiencies so you can more easily identify where you may have people in duplicate functions. This is especially important in mergers or acquisitions.
Gain insight into trends by developing key metric benchmarks that can help you identify workforce issues and talent risks before they impact the business. Consider such factors as labor costs, employee retirement plans and other talent-related risks.
Create better development opportunities for your existing workforce, including helping employees build skills that align with their personal career aspirations. Employees are hungry for development opportunities: A recent PwC survey found that 77% are ready to learn new skills or completely retrain.
Develop retention strategies by using predictive analytics to help identify top performers or people in key roles so you can implement retention tactics. In another PwC survey, 72% of workers told us they’d consider leaving their current employer for a company that cares more about their financial well-being.
Improve recruiting by identifying the skills and attributes of top performers and targeting your recruiting efforts toward candidates with those qualities.
There are many ways to begin. Here are some steps you can take to get started on building a workforce capability within your organization:
1. Start at the top: Commitment to workforce strategy begins with the C-suite. Although HR may eventually own the process, a successful approach is created by leadership, has strong buy-in from the business and includes involvement from all stakeholders.
2. Define and clarify roles: Collaborative ownership is key. Make sure that HR, finance teams and other leaders involved in workforce strategy know what their roles and responsibilities are and how they’ll work with other areas of the business on workforce strategy decisions.
3. Invest in people and build the skills you need for workforce strategy: Data analysis and digital skills are critical to successful workforce strategy. Workers want more skills—80% are confident they can adapt to technology. Create upskilling and development opportunities to help teams that are involved in the process develop those skills. When recruiting, make sure job descriptions reflect the data analysis and digital skills required to handle a robust workforce planning process.
4. Develop more efficient data systems: Data is fundamental to using predictive analytics to establish future workforce needs and timeframes. Yet companies often have to spend a significant amount of time structuring, cleaning or filling in holes in data. Better data systems can lead to more productive, real-time analysis.
5. Invest in technology: Leading-edge tools—whether software, cloud-based or outsourced—allow for predictive analytics and real-time scenario planning. In 2020, HR cloud-based solutions commanded a $148 billion market share in the corporate tech space. It can also help you track and analyze the potential impacts of forces outside your company on your workforce such as social trends, technology advancements, tax strategies and regulatory requirements.
Your employees are the key to your ability to grow and evolve your business. With workforce trends becoming more complex and the pace of change accelerating, it’s imperative to evolve the way you plan for your talent needs.