“It’s the year 2016. The recession is finally over, Europe has realized that the Euro was a mistake, and so countries have reverted to their own currencies, Greece is solvent, and the economies of most developing countries are growing at an unprecedented rate.
“Noctilucent SA, a medium-sized software company based in South Africa has ridden the recession out quite well. They moved into cloud-based computing ahead of the pack, and have managed to maintain their customer base over tough times. They enjoy a reputation for excellent products backed up by excellent customer service.
“Their workforce is a mix of full-time staff and contractors, many of whom have been with them for a long time.
And suddenly the economy is buoyant. There is a huge demand for Noctilucent’s products globally. New prospects and existing customers alike are asking for new products – both off-the-shelf and custom developed.
“Things are really looking up for Noctilucent, but……
“Senior Management and HR face a huge problem. Sure, they had asked themselves the question “If the economy made a turnaround tomorrow, and all of a sudden customers were lining up at our door, would our workforce be in a position to respond to customer demand?” – and their response probably was “of course” and “that will be a good problem to have” -but is the first accurate and the last a bit glib?
“The HR Executive remembers reading the Yoh 2012 Workforce Planning study, which revealed that the single greatest challenge in developing the workforce is the ability to find, recruit, and train the right people. She acknowledges that because there was no real need to grow the workforce, and learning and development was pretty much provided on an ad-hoc, as required basic. Workforce planning has been at best static, at worst non-existent. Is it too late to fix the situation? Will Noctilucent have to turn business away? The sad answer is yes, because evidence shows that evaluating for competency is a task that will take at least three months, and on average six months or more. Once these employees are deemed competent it’s likely that it will take at least six months to get them to a state of high productivity. The statistics suggest that a new employee, even in a best case scenario, is at least nine months away from making any above-average contributions to the organization.”
So what could they have done better? They should have a Strategic Workforce Plan which deals not only with the current scenario, but also a scenario as described in this fable where suddenly business is booming – and it’s worth remembering that economic turnarounds don’t happen overnight, so they could have anticipated the situation at least to some extent. Indeed their Business Plan would have looked at least 3 years into the future, and the Workforce plan should be aligned to the Business Plan.
The aim of Strategic Workforce Planning is to reduce business strategy execution risks associated with workforce capacity, business capability, and flexibility. According to the Draft ANSI-SHRM standard for Workforce Planning it is:
- An ongoing process to identify the workforce needs for the future,
- Identification of the gap between demand and supply for staff – workforce numbers, job roles and skills – and the resultant degree of business risk,
- A critical part of corporate planning and a driver for high impact HR strategy, and
- A plan to inform business decision-making (action and accountability).
The plan is the responsibility of Senior Management in the organization. Obviously HR will facilitate the process, and draw up the actual plan with input from all the stakeholders – but HR must always be the enabler, not the driver.
How often should it be updated? Well at least quarterly, as well as whenever the Strategic Business Plan is amended.
It’s also vital that you have all the metrics you need for the plan – and start measuring what you don’t already. Watch this space for more about the metrics.
Contact TalentAlign if you would like assistance with developing your Strategic Workforce Plan.