Talent of any kind is in high demand, but skilled talent is even scarcer. For 76 percent of senior executives, strategic workforce planning (SWP) "will become their companies' top strategic challenge," according to a study conducted by The Economist Intelligence Unit (EIU) and supported by the ADP Research Institute® report, Strategic Drift: How HR Plans for Change.
While every organization's definition of SWP will vary, most leaders are focused on preventing attrition (36 percent), predicting talent needs (33 percent) and recruitment (33 percent). Many HR leaders are worried about their organization's potential for remaining competitive in a job market where quits are at 2.1 percent per month, according to the Bureau of Labor Statistics (BLS). While focusing on culture, work-life balance and improving benefits are common responses to SWP fears, it's also critical to consider the role technology has to play.
The Connection Between Workforce Planning and Technology
While each individual definition may vary slightly, SWP is generally defined as the ability to know in advance what skills and workers will be needed and having the capability to ensure those gaps are filled on time. For organizations struggling with short-term vision, technology used for planning may be limited to ad hoc measurements via spreadsheets or painstaking combinations of HR data from different sources. To reach planning maturity, you'll likely need to move toward more sophisticated analytics.
People analytics — defined as big data technologies for talent resources management — is gaining traction in the HR world. Deloitte reports that 32 percent of businesses feel ready for HR analytics, while 77 percent believe it's important. The most effective implementations of HCM technologies go far beyond reporting dashboards and other simple metrics.
Technology for talent planning can turn big data into actionable insights for the long-term. McKinsey & Company reports that after creating data-driven profiles of their most effective talent, the HR team for a bank in Asia discovered their recruitment strategy was focused on the wrong places. After aligning their focus with the channels that brought in top performers, the bank achieved a 26 percent increase in productivity gains.
3 Ways to Use HCM Tech for Workforce Planning
1. Create Access to Strategic and Operational Planning Goals
Strategic planning can be one of the most critical measures for HR success. Your talent planning should focus on recruiting, training and succession planning. Technology can enable you to bring strategy and operations together into a comprehensive overview of your workforce.
Harvard Business Review reports that a fast-growing biopharmaceutical business aligned their strategy with operations and participated in the creation of a three-year operating expense budget. The result allowed managers from business, finance and HR to make smarter decisions about workforce needs, while optimizing their mix of employees and contractors to fill critical skill gaps.
2. Get Data-Driven Insights on Talent Requirements
Unfilled vacancies in critical positions can be expensive and risky. Is your business in a position to understand where you'll have hard-to-fill openings, and begin recruitment or internal training efforts? Talent analysis can be important even if your organization isn't hiring. FedScoop notes that the real value of analytics tools is being able to see risks of departures and vacancies in a month, year or five years with knowledge of employees approaching retirement age, flight risks and other benchmarks.
3. Be Proactive By Using Predictive Analytics
If your organization gains the ability to align your workforce needs with HR, how much could you drive profitability through smarter hiring decisions, better retention and other adjustments? The proactive use of analytics requires adequate tech, but the yields can be astounding.
Diginomica notes how Virgin Media used workforce planning data to address absenteeism and turnover in their call centers, where voluntary quits were roughly in line with industry averages. By utilizing previously untapped data sources, the analysts identified issues in policy, knowledge and culture that were contributing to absenteeism. The result was a reduction in absenteeism from 9 percent to 4 percent, allowing the organization to boost performance.
Transforming HR Data Into Strategic Vision
If your organization's workforce plans are informed by ad hoc data analysis and spreadsheets, you may not understand how industry, trends, flight risks and retirements could impact your workforce in the future. By relying on improved systems and data analytics to inform your talent succession and recruitment strategies, you can achieve alignment with operations and finance, improve your internal training and identify opportunities for increased profitability.
To learn more about Strategic Workforce Planning, read the report: Strategic Drift: How HR Plans for Change.