Human Capital Planning

Effective Human Capital Planning is one of the “least practiced” elements of Human Capital Management.  How can we change this?

“Of all the factors affecting firm performance that CEOs and senior managers can directly influence, workforce success – or the extent to which a firm can generate a workforce with the culture, mindset, competencies, and strategic behaviours needed to execute its strategy – is both the most important and most underperforming asset in most businesses.”
From the book “The Workforce Scorecard: Managing Human Capital to Execute Strategy” by Mark Huselid, Brian Becker, and Richard Beatty.

As the picture above suggests, the Human Capital Planning phase of Human Capital Management includes:

• Human Capital Analytics
• Organisational Design
• Workforce Planning
• Competency Management

Human Capital Analytics

In business the only reasons for implementing or changing something is to increase profits, reduce cost, or increase shareholder value. For governments and non-profit organisations the focus is on reducing cost and adding stakeholder value. Improving customer experience is an area of focus for both business and non-business organisations and impacts on the profit/cost equation differently.
This is why we have Human Capital Analytics as the first item in the planning phase. Unless you know what you want to achieve, you can never know whether or not you have achieved it. Furthermore, unless you know where you are at present, you can never set goals that help to improve the situation that you are looking to improve.
By Human Capital Analytics we are not referring to standard metrics used by HR such as “Time to Hire”, “Cost of Hiring”, “Training as a % of Salary Spend” and subjective “performance” metrics. Human Capital Analytics refers to metrics that help to evaluate the success of workforce “strategy”. Metrics such as:

• Separation Costs
• Staff Turnover – by Company, Division, Department, Core Skills, Years of Experience, etc.
• Employee Engagement
• Organisational Capability
• Talent Management 9-box Matrix

These are among the core metrics that help to define and measure the Human Capital strategy of an organisation.
TalentAlign has a number of tools, metrics, and services applicable to any IT organisation to establish and maintain an effective workforce strategy

Organisation Design

Organisation Design is much broader than rearranging the boxes on an organisation chart. But, more often than not, the other aspects of Organisation Design are often overlooked when the “boxes” are being “rearranged”. The other aspects include: alignment with strategy, processes and procedures, rewards, and policies. If these are not considered as part of the whole, it is impossible for a change of structure alone to effect real operational improvement.
Please refer to our separate section on Organisation Design for more information and TalentAlign tools and services that can assist your organisation with this important function.

Workforce Planning

“If you Fail to Plan, you Plan to Fail.” – Norman Vincent Peale

Workforce planning is a process designed to anticipate and integrate the human resource response to an organization’s strategic plan. Workforce planning enables the organisation to:

• Have a strategy for the allocation of resources in a manner that will allow the organization to meet its goals.
• Prepare for contingencies that could prevent the organization from achieving its goals.
• Prepare a framework for the organization’s orderly growth and progress.
• Have a strategic basis for making business decisions.
• Be proactive versus reactive in anticipating workforce needs.
• Maximize organizational effectiveness by integrating the organization’s mission, strategic plan, budget, technology, and human resource needs.

Workforce Planning is a systematic process for identifying, acquiring, developing, and retaining employees to meet the needs of the organization. It requires leadership; clearly articulated vision, mission, and strategic objectives; and cooperative, supportive efforts of staff in several functional areas especially senior and line management.

TalentAlign provides tools and services to help you to ensure that your organisation has:

• the “right” skills,
• in the “right” place,
• at the “right” time, and
• at the “right” price.

Competency Management

In the “Industrial Age” machines, office equipment, buildings, cash, accounts receivables, etc. were the only assets considered deserving of careful management. These were called the “hard” assets and most business measurement systems revolved around these assets. Sadly, most still do today!
The “soft” assets such as people, trade marks, intellectual property, etc. were not seen as being as crucial to business success as the hard factors. Most organizations did not want to waste time or money focusing on improving their employees because they were not “sources of revenue”.
But all this is changing as we move more and more into the very depths of the “Information Age”. Successful companies today are constantly looking to develop more efficient and cost effective methods to develop their products in order to get ahead of their competitors. As more improvements in productivity are made, the physical products and services offered by different companies have become very similar. In today’s competitive environment, managing and improving employee performance is essential for success. Organisations need a clear understanding of the skills and knowledge required to help the organization achieve its goals.
Please see our separate section on Competency Management for more information and key TalentAlign tools and services available to your organisation to understand and implement effective Competency Management.

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