Workforce Planning – Key to Competitive Advantage
Business success is always all about tomorrow. But when companies don’t know their own talent, success is random and thus, not easily scaled. As a result, a majority of companies remain ineffectual at managing and predicting future talent demands. Most business leaders lack the visibility to predict future workforce needs and most HR professionals lack the right tools to provide insights on data-driven workforce questions. And if HR can’t provide smart data, they’ll not only lose credibility – they may lose their jobs. (Bersin; SAP)
In most companies, total cost of workforce averages near 70% of operating expenses. (LinkedIn 2016)
As a result, companies continue to spend a great deal of time and money searching for and managing their talent – and still getting poor results. Large companies continue to operate in a crisis mode of yo- yo talent – accelerating hiring when times are good and turning quickly to layoffs when times are bad.
There is however, a positive trend showing up in business leadership, where workforce planning is understood as not just an HR issue – but as a central business issue.
Why? Because smart, insightful workforce planning minimizes the impact of dynamic economic cycles by identifying and filling talent gaps (e.g., just-in-time hiring and training), forecasting talent needs and managing attrition.
Effective workforce planning minimizes human capital risk while driving long-term business strategies. After all, marketing and sales departments have long relied on predictive data analytics (Salesforce, SAP) to forecast, why not power up workforce planning the same way?
Understanding Talent Gaps
Understanding talent gaps at the individual, team and company levels requires a careful analysis of current talent and an assessment of future talent needs and talent supply.
But according to SAP’s survey of companies 78% percent say they do not have a company-wide approach to:
· Understanding talent gaps
· Forecasting talent gaps
· Effective collaboration between the business and HR
“The problem is not a lack of data. Companies are drowning in employee data. The problem is the low quality of data and the need for smarter tools to generate actionable, just-in-time insights.” Johannesen, 2016
Key Solution: People Data Analytics
Talent retention are increasingly difficult to understand and manage, yet most companies remain behind the curve in employing people data analytics in workforce planning. What’s more, Deloitte’s survey reveals only 6%of companies responded “Very Satisfied” when evaluating their company’s use of “people data.” But change is in the air: In 2015 only 24% of companies reported “feeling ready” for analytics. Today it’s 32% (Global Human Capital Trends, Deloitte).
“We’re moving toward a data-centric mindset” in HR, says Jason Taylor, Chief Scientist for New York City-based Infor Talent Science, which develops analytics software designed to predict job applicant success rates. “We’ve seen lots of organizations making these shifts, measuring performance, identifying behavioral patterns and bringing in the right people based on those patterns.” Taylor says, “If you can scale that, not for one person, but for everyone, you have an entire organization poised for a high probability of success.”
Of companies surveyed, 86% now consider the development of and training in people data analytics a strategic priority over the next three years (PwC survey).
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