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Why quantitative strategic workforce planning focuses on effort, time, and money for the best value return on talent investment?
All HR organizations spend time and resources on acquiring and developing talent to deliver business success. The question is, do we really know how much time and effort is required for each activity and to drive the business strategy? We suspect most good HR leaders have a focus on leadership development, succession planning, recruitment, skill and competence development, and employee engagement activities. However, what we have found is that it is sometimes challenging to allocate time and resources to these efforts in a way that reflects quantifiable future business needs.
"By having true external human capital market expertise as well as internal people knowledge, you can make decisions on where to invest"
Being able to quantify a business need requires two clear inputs. Firstly, you need clear data on your current workforce, including age, skill set, and workforce turnover. In addition, a view from your senior team on the impact that business strategy will have on workforce talent demand in the next three to five years is essential. Bringing these two elements together to quantify the workforce talent gap is a critical first step to defining areas of focus HR.
In addition to the above, we think you also need knowledge of the external human capital market in which you operate. By this, we mean gaining an understanding of big data around scarce skills, demographics, and generational demands that impact your success. HR must be data-savvy. This is critical if we are to understand the degree of difficulty you will face in delivering workforce talent. The external market influences what talent is available, how much it costs, what people want from an employer, and how likely people are to stay with you.
In our experience, HR people focus much less than we think they should on the external market, which leads to unexpected difficulties in attracting and retaining talent. True expertise in this area informs your human capital ‘go to market’ approach. It saves time, effort, and money by enabling you to complete your action plans, acknowledging both internal talent demand and external market influences that impact talent delivery success. By having true external human capital market expertise as well as internal people knowledge, you can make decisions on where to invest.
With this in mind, we have spent the last two and a half years developing a predictive analysis that delivers all of the above and ensures two things. Firstly, that HR can quantify human capital demand of the business strategy. Secondly, HR can quantify the degree of difficulty in delivering the human capital demands via an understanding of both the internal and external human capital markets. This, in itself, puts HR in a position to have clear talent investment discussions at the right strategic level.
Armed with this information, clear action plans can be made, which allocate time and resources according to both company need and external human capital market degree of difficulty. This enables quantifiable decisions to be made on, for example:
• Where to focus more
• Where to focus less
• What to stop
• What to start
• What to redefine
This is a quantifiable and repeatable analysis that holds HR to account and delivers to the business clarity around people-related investments. It explains why we need to step up activity in some areas and scale back in others and ensure that we do not just continue to add to what we do, but we are able to identify where we should do less or adjust and refocus. This is absolutely the only way to do more with less and ensure money, time, and investment is made where it is truly is needed. Surely, a nirvana for HR in any business.