The topic of strategic workforce planning seems to have risen to the top of the HR agenda this year. Last week a networking event on the topic took place in London, organised by the HR Society. I will be writing an report on the event for Personnel Today, but have pulled out some of the key themes below as a taster.
The topic has been bubbling under for a while. Over the summer Nick Kemsley wrote two articles on the topic for Personnel Today. The first looked at how to gather HR data to inform workforce planning in an agile way during the downturn, while the second looked at turning the information into organisational plans.
Among the speakers at the HR Society event on 27 September 2012 was new CIPD chief executive Peter Cheese, who told delegates strategic workforce planning was a top priority for HR:
"When we talk about being more strategic in HR that [i.e. strategic workforce planning] is it, right there"
He went on to say that HR needed to raise its game in general, and seemed to include the CIPD in that: "The CIPD has not been terribly clear what it stands for" in the past. Cheese cited Barclays Bank as an example of an organisation where HR failed to challenge cultural and leadership problems. The bank was fined for manipulating Libor, an interbank lending rate which affects mortgages and loans. He argued that HR should take a lead in articulating what is an organisation's purpose.
Cheese told delegates:
"There's never been a more exciting time to be in HR... We need to up our game. [Barclays] was a failure of culture and leadership. Where was HR in that discussion? We need to confront leaders when it's not right. We haven't always as a profession had the confidence to do that."
The key strategic workforce planning themes that emerged in the conference were:
UK firms are hoarding talent in anticipation of an upturn rather than shedding jobs, and there will be a skills crisis in the medium term
Kevin Green, CEO of the Recruitment and Employment Confederation (REC), pointed out that the private sector has created nearly 500,000 new jobs in the last year while the UK economy has been at best flat. Labour hoarding is going on which helps explain why UK businesses have kept a million more people than predicted in work.
However when the economy picks up there will be a skills crisis.
"It seems it's being driven by a significant shift in both employer and individual behaviour. Businesses have recognised that finding talent in the UK is often a long and expensive process, so rather than let people go only to then have to chase scarce talent when demand comes back employers have hung on to their good people. This is supported by official data which shows productivity has reduced over the last year as employers make a long term trade off and retain their talent."
Green explained this in the REC blog on 28 September:
"In the medium term with any kind of demand returning to the economy the war for talent will be harder fought than ever before. The trends all point to talent becoming ever more scarce. I am convinced we are going to find ourselves with a two speed labour market. In areas where skills and capabilities are in short supply, the market will be driven by those with talent. But in parallel we have a situation of high levels of unemployment among the low and unskilled and a population of long term unemployed who become more isolated and less likely to work and be hired. Our rapidly aging workforce will only make the talent shortage worse."
Cheese supported this view at the event, and urged HR professionals to get to grips with strategic workforce planning:
"The ageing workforce has been ignored for too long... It [strategic workforce planning] is about demographics, understanding why people come and go, and diversity."
He said HR needs more understanding of what is going on in the wider economy and the context. For example, HR should study demographic profiles, understand the population ratio of young to old and look at the implications of a big growth in small businesses. Employers have to recruit more diverse people and have more diverse working practices.
Cheese, citing the BBC as an example, made the strategic case for taking on apprentices and "trying to shift the enterprise into more of an organisation that reflects the [customer base and service uses]". He said the BBC has traditionally been "too Oxbridge".
He called on employers in general to recruit a much more diverse workforce.
"You need to target the employer value proposition at different parts of the workforce than we're targetting. The line manager has to deal with it... "The most important thing is not technical skills, it's behaviour and attitude. We need to align our recruitment processes more to that. We need to be more imaginative when we recruit. Don't just take the guys from the Russell Group with the best degrees."
You have to create an adaptive, more flexible and "agile" organisation
Freelancing and interim posts will grow. Green said "there's a fast growth in freelancing among people who have held senior managerial or professional corporate roles but who now choose to work in a flexible capacity. These arrangements are attractive to businesses as demand for talent in our knowledge based economy is growing, at the same time as businesses are feeling the pressure to keep costs low."
Calling for more radical approaches to flexibility, Cheese said "Work life balance is a meaningless concept - all these boundaries are getting blurred" He added, with reference to younger workers: "If we don't let these people access Facebook in working time they're not going to stay with us."
Again, Cheese said the key is to train line managers.
He called on organisations to adopt a new operating model relating to how decisions are made, using methods such as "organisational network analysis" to map an organisation on the basis of how people communicate and connect.
Wendy Cartwright, director of HR at the Olympic Delivery Authority, presented a case study of a highly flexible organisation as an example of how it can be achieved.
HR should be able to express an organisation's purpose and influence leadership and culture
Cheese said HR should be able to articulate the purpose of an organisation: "Why we're in businesses, what are we here for and how can we build the right culture. Who is it who should be able to understand the culture? HR!"
Barclays Bank is an example of an organisation that didn't understand their values or play by them. "The problem with Barclays is about culture and leadership... Culture can eat strategy for breakfast," said Cheese.
We need a better balance between fixed and variable pay
Continuing the theme of flexibility and being able to respond to changes for the better or worse, Duncan Brown, principle at Aon Hewitt, called for a better balance between fixed and variable pay. He said HR also needs to address the damaging effects of increasing pay differentials and shift to a better balance. Pay should move from being secret to being open. Brown questioned whether senior pay really needed to be so complex.
Fair pay should be emphasised in reward strategy, he urged.
About the HR Society
The HR Society has the slogan 'the business edge of HR'. It is network of senior HR professionals, academics and others across all sectors. Its mission is "to lead thinking and share good practice in the linking of people, planning and productivity, and in so doing provide a network forum for professionals working in this area."