79% of CEOs are concerned about skill availability impacting innovation, cost, quality and growth at their organisation. The pandemic has only exacerbated the problem, as Covid-19 continues to disrupt work and workforce models. Findings from a recent survey conducted by McKinsey show that 35% of global executives said they would need more workers skilled in automation, AI, and robotics, a reflection of the increased deployment of automation during COVID-19. Furthermore, 70% said that two years from now they expect to use more temporary workers and contractors than they did before the COVID-19 crisis.

In a bid to tackle this skills conundrum, organisations are turning to skills-based workforce planning. According to Insight222’s own research, nearly all companies (90%) express a desire to build a skills-based workforce planning process. However, only a quarter of companies (26%) are actively doing so.

I caught up recently with Alicia Roach, Co-Founder and Director at eQ8 and a recognised thought leader in Strategic Workforce Planning and Analytics, to hear her views on the future of workforce planning and how it can be used to help organisations access the skills they need to thrive in the digital age.

1. You often talk about connecting people and purpose, can you share some insight on how organisations might go about doing that or getting started down that path?

Indeed. This is about answering what is, in my mind, THE most fundamental question for an organisation: what is our purpose, and what will it take to achieve it? This is recognising that an organisation’s people, i.e., its workforce, is the execution vehicle for that purpose. The best leaders recognise that the workforce is not some afterthought, that will just materialise with the right capability and capacity as and when it’s needed. And by the way, what we are talking about is usually the largest cost and most definitely is the biggest asset for organisations, so it just makes sense to do this.

Understanding the questions to answer is really important for organisations as they go down this path. It is always so surprising to me that organisations don’t have their arms around the fundamentals. For example, if you ask an organisation if they have a view of the workforce (size, skills and shape) they need today - 70-80% answer “no”. Ask them if they have a view of the workforce needed in three or five years, and the “no’s” rise nearly to 100%! And yet virtually all leaders understand their company will look different in five years’ time! It is truly baffling that leaders acknowledge change is coming, is inevitable, is here already – but don’t have any way to understand what this means for their organisation, their workforce. This is what we are looking to solve for.

So, Strategic Workforce Planning (or SWP) is the way to bridge this risky gap. This is about understanding purpose, strategy and translating that into workforce implications. It creates that inherent link between people and purpose, aligning the workforce to the value chain and activity drivers of the organisation. It goes beyond the day-to-day BAU fluctuations, to also capture the change factors that matter. The reality is that to deliver its transformation, digitisation or growth agendas, leaders are relying on the capabilities and skills of the workforce

Fundamentally, SWP drives a conversation. This is a critical conversation, because we are evolving HR from past process-driven agendas, into a truly strategic and transformative member of the leadership team. This is about understanding the strategy, factors of change, competitive advantage and so on, and what it then means for the people in the organisation. The framework below captures these elements.

If you ask your leaders: “What keeps you up at night?” it is unlikely to be the recruitment process or remuneration review - well, unless maybe it is their own salary at hand 😉. Overwhelmingly, most C-Suite executives are increasingly concerned with having the skills in place needed for them to deliver. It has to be a two-way street though – where HR does something with the answers to bring back value, insights and business impact – which is what SWP is all about!

2. How has the role of and need for SWP changed in light of Covid?

It has become so much more critical. It’s funny, I have been working in the SWP space for (quite) a number of years now, and I feel like now it’s really having a “renaissance”. I mean, the reality was that organisations were already navigating so much change, even pre-Covid. Digitisation, transformation, globalisation, demographic changes and so on. However, what Covid has done is compress the pain points for all, amplifying many of these powerful forces. Skills shortages that seemed way off in the future somewhere are here now. The talent market is burning hot, in particular for certain workforce segments. These forces are only growing in complexity.

Leaders must be able to navigate these forces to thrive. How else other than SWP will they model the future to really make the right Buy Build Borrow decisions, mitigate risk to execution, and ensure the organisation’s very existence? Things like remote working, customer proximity, health and safety, productivity changes, technology adoption, process changes - I could go on and on. Suffice to say that for organisations to get their arms around all of these dynamics and understand the impact for itself not only at a macro level, but also for each and every workforce segment, requires robust scenario planning. This is something that I have only really ever seen effectively done through the SWP process.

If anything, this period has highlighted the failure of near-term agility. By the way, “agile” doesn’t mean we just react to whatever the latest order of the day is! Many organisations have emerged from 2020 and realised that they didn’t make the best decisions. There were some short-term reactive actions that didn’t set them up in the best way and constrained their ability to execute now, and in fact may have seriously damaged their longer-term trajectory. You know the drill: blanket cost-cuts or workforce reductions that may have removed skillsets that were critical for the organisation to realise its transformation goals. Hiring freezes that mean customers were underserved and/or lost. Unclear and inconsistent messaging to employees that impeded engagement, culture and productivity. Moving from that knee-jerk reactivity requires future looking forecasts and scenario planning, to bring coherence and intention to the choices that orgs are making. SWP enables this.

3. In a recent article you shared how the ‘5C’s’ (Cost, Capability, Community, Commercial, Creation) support organisations to measure the success of SWP, can you share a bit more about the measurement framework you’ve built?

We really saw that, across the globe, organisations were not sure how to articulate the benefits of SWP. HR leaders have struggled to get momentum with executives. Even when having completed SWP, we wanted to enable a consistent approach in how to articulate its success, in how value was captured and realised.

This framework is underpinned by what I think is a really important part of where we are heading - the fundamental shift in how organisations look at their people. Moving the view from the workforce as a cost, to the fact that it actually is a value-generating asset. It is way, way beyond the old-school view of economic logic and optimising a cost base. When an organisation does not get this right, the value destruction is HUGE. Undercooking the right workforce capability and capacity – well, this is a top line impact for businesses and an inability to fulfil the mandate for Not for Profit’s (NFPs). It hits the ability to deliver purpose, to meet targets, to operate effectively, to serve customers, to transform, to innovate. Even to exist.

I am passionate about this at a societal level; getting this right goes to the heart of social responsibility. There is a lot of talk about this conceptually, but it is all too often just lip service. In the next breath, these same organisations are suddenly behind closed doors organising the next round of “restructures” (ie. Cost-cuts), bringing uncertainty and reactivity into the fabric of the company, and indeed, our lives. This immediately impacts those affected, yes. It also impairs the culture, Employee Value Proposition (EVP), employee experience, productivity, and so on for years to come, often irreparably. Multiply this across the market, and we have all been affected one way or another.

Interested in learning more about Workforce Planning? Take a look at our online Workforce Planning and People Analytics certifications on myHRfuture.

Organisations need to recognise that their people are the community, are society, are the “social” for which we must be “responsible”. Yes, they will undoubtedly have shifting workforce requirements – but imagine letting employees know well in advance, helping them prepare for transition in a compassionate and honest way. Or even better yet - identifying that they actually have 60/70/80% of the future skills needed to bring them on the upskilling/reskilling revolution with you!

HR needs to be clear how SWP is addressing a spectrum of priorities:

4. How do you make sure that you’re considering strategic tactical and operational workforce planning, so that you’re planning for the short, mid and long-term? What’s the right way to balance and plan for these different time frames?

This is such a great question. I am excited by this, because all too often we see organisations still conflate the differing tempos of workforce planning and assume they have it all solved. The number of times I have heard “We already do SWP because we have rosters/workforce management/recruitment planning” – well, let’s just say if I received a dollar each time . . .

Perhaps it is the inner accountant in me, but the best way I can explain it is to liken it to the financial cycles of most organisations, which is something most are familiar with. Typically, such cycles start with a longer-term strategy or plan which sets the scene for the direction and goals of the organisation – say over 3 years. This then gets broken down into shorter-term budgets, where the company understands what its parameters are, for say 12 months. That 12-month view is then broken down into monthly budgets, alongside which there is a reporting of actuals and a forecasting/reforecasting of where things are tracking against what has been set.

Without alignment on the longer-term direction and context, the organisation risks optimising month to month without really knowing where it is heading and how it is going to get there. Imagine just setting a budget each month, with no line of sight as to how that rolls up to achieve the organisations overall targets, objectives, goals. And then when things do not end up aligned to that budget, how do you know where to fix? It all becomes very siloed, super reactive and totally unsustainable.

It is the exact same principle that we need to apply to workforce planning. It must start with SWP and sequence accordingly. Understand what the workforce capability (shape – skills) and capacity (size - FTE/HC) need to be in order to align to the organisation’s strategy. We then break that down into shorter-term tactical plans, such as recruitment planning and feed this into above-mentioned budgets. And then deploy that on an operational, day-to-day basis. If we don’t look at the longer-term and understand the workforce size, skills and shape needed, we won’t actually have it in place to then be able to deploy on a shorter-term basis.

Unfortunately, most organisations operate in reverse. Rostering the resources they have, well that is down pat. But knowing how those resources need to shape and shift into the future – not so much. Which is why we see quite serious problems manifesting. We see many organisations with hundreds, if not thousands, of open requisitions that they cannot fill. Their demand has suddenly changed so significantly but they had no foresight of this, no plan. So, the hiring managers are banging down the doors of their (overworked, frustrated, disengaged) Talent Acquisition teams and there is quite literally, nothing that can be done. You can’t click your fingers and just materialise those skills overnight. Indeed, the HUGE failure rates of transformation and/or digitisation initiatives are due to not having the right skills in place, which could have been solved through having had that SWP . . .

5. Traditionally eQ8 has focused on providing consulting in the workforce planning space, however not too long ago you made the leap from consulting into workforce planning technology, can you share what prompted this shift?

Absolutely. There was just such a gap in the market for true end-to-end SWP tech. It was something I had seen as early as a decade (or more – blush) earlier when I was leading SWP functions from within large corporates. Having gone to the market repeatedly, I ended up with my own DIY in various forms. Either creating a “home-made” solution in Excel with some front-end dashboarding/visualisation. Or even at one company, building an SWP system from scratch!!! The problem with the first is that, as much as I love Excel, it is inherently unsustainable, unscalable and challenging to deploy in a cross-functional, roll-up/down way. The second one is a challenge also – unless your company happens to be in the business of building custom software, you can’t keep the ongoing attention of your IT department. Not to mention that both options must evolve to keep up with emerging best practice, external data, trends and innovation.

When we left corporate to start our consulting business, we knew software was the end game. However, we wanted to better understand the key factors across a broader range of companies, industries, shapes, sizes - SWP is definitely not a one-size-fits-all modality! We needed to learn what organisations needed in terms of where could we create flexibility, where could we have things on rails, what was non-negotiable and so on. We have all seen where tech created by tech fails. We needed to create technology that was ground in deep expertise, applied experience and met the need of actual real-life customers.

We are now a platform-led business because consulting is inherently unsustainable for customers. We hold an absolute and utter belief that SWP needs, needs, needs to be owned by the organisation itself. It needs to be sustainable, it needs to be scalable, and it needs to be dynamic. Beautiful PowerPoint decks delivered by external parties with meaningful content can get part of the way – but they are siloed, quickly out of date and/or filed away in an email folder. Fundamentally, SWP captures strategy, and the organisation must own that strategy, therefore owning its SWP.

And hence, eQ8 was born!

6. The focus in workforce planning should always be on delivering business value rather than jumping on the newest technology to solve their problems. How should organisations ensure that they’re not just jumping on the latest tool but that they’re managing the business need?

One hundred percent. SWP is inherently about business enablement and impact. Something we often say is that SWP is actually a business forecasting process, with the common denominator being people!

As a CEO or other C-Suite leader, if you don’t know what workforce you need today and how that needs to shift over the next one, two or five years, how do you really know that you can deliver on your organisation or functional objectives/strategy/purpose? We see repeatedly where SWP is the key recommendation to deal with Future of Work or emerging skills issues. That having the right workforce and skills is one of, if not THE, most important factors for enabling successful digitisation/transformation/growth agendas. Why? Because, an organisation can have the best vision, culture and leadership in the universe, but if it doesn’t have the right execution vehicle in place (the workforce), it isn’t going to happen. SWP solves this.

For most organisations, technology should be an enabler. A means, not the end. However, SWP is particularly challenging that usually winds up requiring technology to become optimised. SWP is not only bringing multiple data points together, but driving a conversation about the future, a future that is inherently uncertain. So, you need something that can be dynamic, to be able to quickly revisit your SWP as things (invariably) change. Technology allows consideration of different possible futures, i.e., scenario planning – which is critical for successful SWP and is indeed core to eQ8. Our customers could not deliver business value without it.

7. Can you share with our readers some examples of how you’re supporting organisations like MetLife connect their people to purpose and deliver on their business strategy?

Where we really shine for our customers is in accelerating their SWP journeys. SWP is a process and a philosophy, which requires a solid product to execute! We can bring decades of expertise, lessons (sometimes learned the hard way) and cutting-edge technology to rapidly get their people connected to their purpose.

MetLife is a great example. One of the oldest insurance companies in the world, facing change and disruption, desired an innovative approach to looking forward. The team was clear on what they wanted to do, requiring SWP to nail demand planning. We listened to what they needed to achieve and mapped out a roadmap for them to grow their maturity. Then we launched the platform and training as a basis for rolling SWP delivery. One of the lessons we learned with them is the need to get wins early by showcasing one of the most powerful elements of SWP (have I mentioned its criticality enough?), the scenario workshop. This is where we get leaders debating the different macro-factors impacting the workforce forecast, both in terms of capability and capacity. It never fails to shine a light on different assumptions being made by leaders about the future.

Another recent example is our launch with an e-commerce retailer. They are experiencing tremendous growth, as you would expect, lifted by the even greater shift to online buying. We applied those lessons from MetLife, to run an accelerated program for getting executives in a room debating how the execution of its ambitious growth will play out. Our approach drove the conversation in a new way, powering a new alignment amongst senior leadership. They now share an understanding of the relationship between strategy and required future workforce skills that were going to be show-stoppers. eQ8 quantified the commercial exposure of unmet demand due to workforce at nearly $200m. Even better, the company now has a preliminary plan to address that exposure through 17 prioritised initiatives including targeted skills enablement. As we further embed SWP, the internal team are empowered to deliver across each business area.

Importantly, this is not just for commercial organisations – government and NFPs are equally enabled through undertaking SWP. We are the SWP platform for a large global humanitarian organisation. They have experienced a doubling of the workforce recently due to huge increases in mandate. eQ8 captures both strategic top-down and functional bottom up SWP’s, to help create alignment of the long-term workforce implications of their mission. The multi-directional view was refined through dynamic scenario modelling (there it is again!) and is actually being used as a key input into broader strategic planning processes for their entire organisation.

8. What advice would you have for organisations that are starting out on this journey of building their workforce planning function?

The first thing that I would say is to just get started. But use numbers; estimates drive a conversation light years ahead of qualitative approaches. So many companies we speak to who are thinking about embarking on their SWP journey, have a multitude of factors that are perceived to be holding them back. Usually, it is the common ones around not having the right process/data/people – all of which can be overcome. Or time – yes, we all are busy, busy, busy, and caught up in the urgency of what is front of us and will get to that other “planning for the future” stuff later. But what if later is too late? Shifting the deck chairs on the Titanic is a trope, but a good trope. Your business model is outdated, you haven’t been able to innovate, change and adapt? #gameover

Some will say “well, we haven’t been asked to do this” – well of course not! Most of your organisation will have never seen SWP before, or not seen it done well anyway. Or they don’t know (or worse, believe) that HR can do it. So, they never even think to ask for it! Yes, stakeholder engagement is an important part of SWP, but oftentimes these stakeholders are not the ones initiating SWP. Although, on a side note, it has actually become increasingly so where Boards/CEOs/C-Suites or Ops are now hitting their HR functions up for SWP – exciting! This is because the impact of SWP is so significant. It truly is such a game-changer for not only HR functions, but the entire organisations themselves.

There are a few ways to start out and get some traction. The quickest is identifying a burning platform for the organisation – some pain point that is being felt now. News headlines, CEO statements, and so on usually will point to this. Or the pain point may be narrower and within the HR function itself, such as the over-burdened Talent Acquisition team or the directionless L&D function. How can you use SWP to solve their problems by providing more insight and enablement?

Another way is to engage with some cross-functional “friendlies” – in Finance or Operations. At its most successful, SWP is the integration of HR, Finance and Strategy/Business – so this can be a great way to start. Find a pilot area, build out the proof points and create that momentum! So many times we have seen customers go from a (sometimes unwilling) pilot segment, to a queue backed up out the door, begging to be the next cab-off-the-rank!

Finally, bringing insights on emerging labour/skills shortages, industry changes and impacts and so on can get our colleagues to sit up and take notice. Linking these to their execution challenges or existing pain points, as above, and having a clear view of how you can help to solve it (SWP – obviously!) can be extremely compelling.

This is absolutely the path to those things we have heard bandied around for all too long – SWP is the way to “speak the language of the business” and “have the seat at the table”. Once you do it, you will never go back!

9. What does the future of workforce planning look like to you?

My over-arching vision is that SWP is such an integral part of an organisation’s planning cycles that it actually becomes a core process. No organisation strategy should be submitted to the Board without it! Earlier I said that SWP is actually a business planning process that happens to be denominated in workforce – so I believe this is where it can, and should, head. An HR industry leader has attributed “every issue in the economy to a problem with training, skilling, recruiting or business management”. The disconnect is that many companies face with tackling this, is that these problems are still dealt with on a short-term, siloed and reactive basis. SWP lifts you out of that tempo, to create an inherent alignment of the workforce to purpose/strategy, a coherence across the entire business and a roadmap for HR across all of its initiatives.

Also, the future (or the now) of SWP is around skills forecasts. This has been our biggest focus during the past year, and we have created an integrated approach to skills planning that, to quote one of our customers, is a “game-changer”. I truly see that organisations are more skills focused than ever before. It is great, because it is lifting the workforce (and workforce planning) agenda to a greater profile than ever before. A big missing piece is that most companies have no way to understand the skills they will need in one, two or five years. We did not see many platforms addressing both future skills and internal demand forecasting, so we built it. Without this, it is difficult for L&D to future proof workers careers or deliver organisations the critical, future-ready workforce. Alternatively, we are seeing blanket “future skills” programs are being offered that may make HR feel all warm and fuzzy as they roll out another “digital skills” program, but don’t really align to the specific needs of the organisation. Again, undertaking SWP and translating business objectives into requisite skills, gives this critical insight into what is needed.

Finally, the future is that organisations realise that the workforce is not a separate entity – that the organisation is their people, that their people are the organisation. There is an innate knowing that the organisation cannot get where it needs to go without its people. That purpose without people is just a theory. So, connecting people to purpose through SWP is the future.

THANK YOU

Thanks to Alicia for her time and for sharing her views on the future of workforce planning and some of the extremely exciting work they’re doing at eQ8 to help organisations access the skills they need to thrive. If you want to find out more, you can connect with Alicia on LinkedIn and visit eQ8’s website.

If you’d like to explore more of Alicia’s work, take a look at some of the fantastic blogs she’s written below:

· How can Workforce Planning help in times of Uncertainty?

· Why you can’t afford to NOT do Strategic Workforce Planning

· Connecting People to Purpose – The Ultimate HR Mission

· The Path to Transformation and Organisational Effectiveness? (aka Strategic Workforce Planning)

· How Strategic Workforce Planning adds Business Value

· How to Successfully Implement Strategic Workforce Planning

Build the skills you need to deliver business value with Workforce Planning

At its best, workforce planning delivers millions of dollars to the enterprise through predicting where skills and workforce costs will be in the future and how to plan for them in the right locations, while managing existing costs. Conversely, we have seen that when workforce planning is done poorly, it is “hidden away” in HR, with individuals who don’t have strong business stakeholders engaged, use incomplete data and struggle to create impact. The myHRfuture academy is a learning experience platform for HR professionals looking to invest in their careers. We have several training courses that are targeted at HR professionals looking to learn about Workforce Planning and Strategic Workforce Planning. Our content helps HR practitioners to become more knowledgeable about how to get started in workforce planning, explore strategic business goals that are best suited to a skills-based approach, which data and technology solutions are required, and how to ensure that workforce planning delivers value for the business. Subscribe to myHRfuture today for only £25 per month.

ABOUT THE AUTHORS

Alicia Roach is the Co-Founder and Director of eQ8 and a recognised thought leader in Strategic Workforce Planning and Analytics. The eQ8 Strategic Workforce Planning Platform was created to help organisations accelerate their planning for Transformation and the Future of Work using the most sophisticated technology available. You can contact her to learn more at aliciaroach@eQ8.ai or by visiting www.eQ8.ai

David Green is an author, speaker and executive consultant on people analytics, data-driven HR and the future of work. As Managing Partner and Executive Director, David has overall responsibility for the delivery of the Insight222 People Analytics Program, which supports the advancement of people analytics in over 80 global organisations. Prior to co-founding Insight222 and taking up a board advisor role at TrustSphere, David accumulated over 20 years experience in the human resources and people analytics fields, including as Global Director of People Analytics Solutions at IBM. David also hosts the Digital HR Leaders Podcast, is an instructor for Insight222's myHRfuture Academy and co-authored the book Excellence in People Analytics: How to use Workforce Data to Create Business Value, with Jonathan Ferrar.

How Can Workforce Planning Help Organisations Access the Skills they need to Thrive in the Digital Age?