A Model for Workforce Planning

Finding great employees can be a daunting task, especially because we are not usually looking for great employees.

Please don’t get me wrong, organizations know they need people to do jobs that are important to the operations of the organization. But how many organizations plan ahead to get great people?

A lot of hiring decisions are urgent and desperate, which leads to a process that may be sub-optimal, except the organization is lucky. The exercise for recruiting employees must be a deliberate process, properly planned in advance and executed with confidence from end to end.

The simple point here is that workforce planning must be a strategic imperative for every organization, small or big.

Workforce Planning must be the default nature of any organization seeking to win in the information age. The term Workforce Planning however appears to be both familiar and unfamiliar because its presentation across literature and various sources is quite academic.

In this piece, we will try to bring the term home. It is a concept the average manager and executive should be able to appreciate.

What is Workforce Planning? In very simple terms, workforce planning is the process an organization uses to align its strategy to its people needs. This sounds so easy right? Actually, it is. But please stay with me.

 It is important to underscore that such people need be the best the organization can get, afford and retain. The strategy of the organization must also have been done with the most useful competitive strategy tools. Typically, I rely on strategy analysis framework tools from Michael Porter’s Competitive Strategy.

I find these tools to be robust, and they were actually designed to help managers navigate internal and external business environments.

Now, we have established that Workforce Planning involves a simple combination of People Needs and Strategy. How do we proceed?

I recommend that you have a Workforce Planning Model.  But why models. Let me share a quote from Charlie Munger, Warren Buffets partner at Berkshire.

“To become wise you’ve got to have models in your head. And you’ve got to array your experience—both vicarious and direct—on this latticework of models” -

I agree with him, models make us wise. A model is simply a representation of phenomena or concepts you want to work with. Typically, it will have variables. I have created a Working Workforce Planning Model here with variables that you can revise to suit your organizational needs.

Our Working Workforce Planning Model here comprises of six variables;

-         Strategic Industry Analysis

-         Placement practices

-         Labour Market Demand and Supply Forces

-         Talent Development practices

-         Strategic Compensation

-         Employer Branding

1.      Strategic Industry Analysis:

 Organizations have to make choices on how best to compete in their industry. These choices are ultimately the strategy the organization chooses to pursue. Strategic Planning is done explicitly through organization wide formal brainstorming sessions, or implicitly, where managers and department/functions make decisions to support the growth of their individual departments.

It is better for strategic planning to be conducted through an explicit process where executive management and mid-level managers incorporate frontline employee insights to craft a direction for the organization.

Strategic Planning requires tools in order that the organization may conduct a careful, exhaustive and useful analysis. In this case we recommend Michael Porters Five Forces. The five forces are;

-                Competition in the industry

A large number of competitors usually implies a low barrier to entry. This usually makes it difficult to charge a premium on goods and services. Thus, you may have to resort to differentiation or compete based on cost.

Irrespective any choice you make, consider the impact it has on the kind of employees you need. Pursuing the differentiation route may require that you employ people who can do what other industry talents cannot do.

This implies a specialist orientation.

Meanwhile, a low cost choice will demand that employees be able to operate in a lean and mean environment.

The implication of any choice you make must be reflected in your competency models for jobs and recruitment process.

-                 Potential of new entrants into the industry

What special capabilities do your competitors have? What is the quality of their product or service? Are they disruptive; targeting smaller segments with cheaper products, and ultimately targeting your market share?

Here you must also look at the knowledge their human capital possesses. Their organizational structure must also be studied.

You also need to ask; what type of people are they recruiting? Which organizations are they recruiting from? Will they target our best people?

-                Power of Suppliers

What sort of power do your suppliers have? How is your procurement department structured to operate? Procurement departments must be designed to be transformational by evaluating the impact of suppliers and sharing feedback with the organization, real time.

The level of inflexibility of your suppliers may require you to hire employees that have the character to break new grounds. You may need employees that have the mentality to create new markets and new products.

This may also have implications on your organization culture, where you may want to decide on choosing between employees who can hold the line, or those who cross the line to reach innovation. It may also inform choices on creating an organization that has a high leadership capital or one where leadership is centralized.

-                Power of Customers

 Do your customers have high or low switching costs? Are they in a romantic relationship between you and your competitors?

This questions may lead to you creating an organization that is customer-centric, subscription, sales driven or account management driven.

While all these approaches may be employed, you may need to ensure one approach leads other approaches.

 -                Threat of Substitute Products

Threats from alternatives are always there. The question is should an organization prime its workforce to be reactive, complacent or proactive in product or service development?

The proactive approach is the most sustainable and strategic option. Employees must be driven to share recommendations and demonstrate product knowledge. This keeps everyone agile and alive to threats. It also helps reinforce the need for the organization to develop products proactively.

2.          Placement Practices

I have seen how organizations actively look for talent while the same talent is resident in their organization. This problem can be solved using HR analytics and performance measurement tools. This is an obvious choice. But it must not be secondary nature.

Organizations can only get the best of the tools if they maintain a level of management presence and consciousness.

Placement must be done in alignment with the strategy of the organization. An organization that has decided to be dominantly led by customer-centricity must match employees who have the qualities to job openings or entirely new job roles.

3.      Labour Market Demand Supply Forces:

Demand and Supply has long been the core of workforce planning. They help organizations appreciate when organizations are over-staffed or under-staffed. They also help understand the nuances of organizations laying off their best people.

Andela laid off over 400 people recently, where are those people now? I believe the average technology organization should prepare for events such as this planning with various scenarios in order to attract such talent.

Here, you can ask what if questions. What if talented people lose their jobs today, how can we spot them? What if the economy slows down? Can we offer succor to our best people? What if there is a boom? How do we retain our best people?

These and many more questions can help cope with demand supply ends of the labour market.

4.      Talent Development Practice’s

The best of people know what is happening in your organization. They ask more questions than the average person on the planet. They have friends, high fliers who work for you. Thus, to attract them, you must have practices that align their interests with your strategy and talent development practices.

Your talent development practices must be dynamic. Yes, that is more work. But it is less work, compared to the work involved in managing loss of valuable employees and inability to even attract the best easily.

5.      Strategic Compensation

Good things cost money, just like diamonds, good people also cost money. Beyond salaries, benefit programs also help in attracting the best talent to your organization.

Your compensation structure must align with your business strategy such that you can maintain internal and external equity.  

In simple terms, internal equity means that you structure your compensation to favour your most valuable job roles. An engineering firm will most likely pay engineers more. Same with a hospital that pays the doctors more.

External equity requires that your pay be competitive enough to put you up for consideration.

6.      Employer Brand

 The best will consider some of the things highlighted above, but the very best will care about this more. When the name of your organization is mentioned, what image does it bring? An organization that puts people first? Good for career development?

Whatever it is, make sure it is good. If it is good, you can bet that you are in a good position to attract desired employees.

I hope you find this piece useful. I am available should you have any questions on this subject. To reach me, send an email to [email protected]