This article was updated on Aug. 24, 2018.
Even if you think your workforce strategy is up-to-date, there's a chance you're still inadvertently using workforce planning strategies of the 1980s. According to Strategic Drift: How HR Plans for Change, a study conducted by The Economist Intelligence Unit (EIU) and supported by the ADP Research Institute®, 76 percent of senior executives believe strategic workforce planning (SWP) will become their greatest challenge.
There's a shortage of skilled workers because of today's low unemployment rates and shifting industries. However, the early 1980s recession, which the Bureau of Labor Statistics (BLS) indicates peaked with a 9.7 percent unemployment rate, resulted in SWP attitudes that linger on today.
Why Were These Strategies Adopted?
The economic struggles of the early 1980s had a lasting cultural impact on HR organizations. During a recession, HR can be tempted to focus on the short-term and shift to cuts and a more administrative role instead of recruiting for the future and developing a long-term outlook.
What Is Strategic Workforce Planning?
The SWP report found little consensus among executives about what SWP should look like:
- 36 percent believe it's retention
- 33 percent believe it's planning around future skill requirements
- 33 percent believe it's finding new qualified people to plug skills gaps
HR should look to gain acceptance in their organization as the primary driver of SWP to get beyond the conventions of the past and survive a possible talent desert ahead.
The Evolving Talent Marketplace
Approximately one-half of today's executives believe their organization is prepared to face the current and future challenges of an evolving talent marketplace, according to the Strategic Drift report. The 1980s may have instilled confidence in talent availability, but this mindset should be avoided in today's talent climate. The second quarter of 2018 saw an overall turnover rate of 63 percent, and sought-after information professionals, for example, saw 5.5 percent in wage growth after switching jobs, according to the ADP Research Institute Workforce Vitality Report. HR leaders should be sure their SWP is attuned to the realities of today's job-switching market to stay ahead.
How to Update Your Workforce Planning Mindset
Today's executives know they need to focus on retention efforts. In fact, the Strategic Drift report states that 72 percent plan to invest in their culture, work environment and benefits in order to retain staff. Luckily for today's HR leaders, there's a major difference between SWP in the 1980s and today — smart data tools for HCM. With the ability to benchmark your organization's talent against industry and regional trends, you can discover what your talent needs to stay and offer it to them before they look for it elsewhere.
By losing the mindset of the 1980s that talent is widely available and something for only the C-suite to worry about, HR can be better prepared for talent challenges today and well-positioned to pivot should those challenges evolve in the future.