Strategic workforce planning (SWP) has taken a long and winding road over the past 15 years and the final destination appears (for most) to be dusty binders and another opportunity lost for the HR function to deliver strategic business value. What happened? How did a process with such promise fail to live up to the hype and under-deliver in so many cases? How can it be salvaged and made valuable again?
SWP brings to mind the Vasa, a powerful warship ship that sank on its maiden voyage in 1628 just minutes after leaving the Stockholm harbor because of poor design and planning, requirements creep, and excessive innovation, including overloaded features and ornamentation. The ship was salvaged in the 1960’s and resides today in Scandinavia’s most visited museum.
SWP offered HR a foray into strategy—a ticket to “sit at the table” and partner with the business to truly connect people decisions to the strategy. It was to be the holy grail of all things strategic in HR and held the promise of being able to ensure the right people, in the right roles, at the right time and cost to successfully execute strategy. Within some companies, this promise has been fulfilled and tangible business value realized. Unfortunately, this is more the exception than the rule. Why? Because of familiar reasons that often characterize failed HR initiatives.
So what are these reasons and what can HR do to refocus its thinking and approach to SWP to finally deliver real business value before it becomes another failed HR promise? We offer the following for your consideration.
Good business strategy is anchored on the fundamental understanding of a company’s marketplace, the forces that shape it, and what it takes to win within it. A good strategic workforce plan requires HR to understand these fundamentals as well as the leaders who run their business and develop its strategy.
We still find that the lack of business acumen hinders most SWP efforts. HR’s view of and approach to SWP is too often shaped and managed by people who, through formal education and/or experience, possess deep technical expertise in HR, Organization Development, or I/O Psychology. While valuable in their areas of technical expertise, they often do not possess a level of business acumen that enables them to understand and analyze a business’s competitive landscape, decipher market, financial and operational forces, understand organizational dynamics and economic constraints, and consider these factors in determining future workforce requirements. Companies that recognize business acumen as a key to successful SWP rely on line leaders, heads of strategy and in some cases experienced generalists with “field” experience to drive the process while tapping into technical professionals for analytic support.
Developing sound business strategy begins with knowing what questions to ask about the business and competitive forces and guiding the conversations necessary to answer them. SWP is no different yet we continue to find poor quality conversations and an obsessive focus on tools and analytics that provide interesting data, but often irrelevant insights. HR, using its business understanding and business acumen, needs to identify the critical questions that help connect business strategy to workforce strategy and drive the critical thinking and constructive discourse required to answer them. It’s the conversation (and not the tool or analyses) that results in business leaders making informed decisions regarding future workforce requirements and investments.
Unfortunately, HR has become enamored with software-as-a-service tools that promise to provide insights with the push of a button. It’s as if a new segment within the software industry was born almost overnight. (A Google search of the term “workforce planning tools” yields over 4 million results.)
The plethora of SWP certifications and training have only reinforced this myopic focus on analytics and tools, resulting in many organizations getting stuck in the weeds. As the SWP movement took hold it quickly captured the attention of firms who saw a market opportunity to deliver services that promised to transform HR pros into workforce planners. While this was a boon for the organizations offering these services, it did little more than add another set of templates and tools to the HR toolbox. It is apparent now that training in frameworks, tools, and models can’t replace the critical thinking and business acumen that are truly foundational to relevant and actionable strategic workforce plans.
Keep SWP strategic. Strategic workforce planning is a process that translates business strategy into workforce strategy. In doing so, it should inform HR strategies and processes to execute the plan just as business strategies inform downstream operational strategies and processes focused on inventing, making, and selling a company’s products or services.
We often find HR has dropped the “S” from SWP and designed workforce planning processes that are glorified annual headcount planning exercises tied to operational budgeting activities. Why? Because of the absence of business thinking and the focus on data visualization and irrelevant analytics that frequently result in leadership losing interest and confidence in SWP. They fall back on relying on HR to do what they have done well over many years—headcount planning focused on affordability—versus differentiation and optimization to achieve business strategy.
We also find that HR tends to design SWP as a be-all and end-all for workforce management—the catch-all for all things strategic in HR. SWP becomes the latest program for downstream workforce management processes such as talent review and succession planning. This reinforces leadership’s frustration with HR and further populates the HR graveyard of failed attempts to be strategically relevant.
So, is strategic workforce planning another lost opportunity for HR to deliver real business value? We believe the answer is “Not yet.” However, we also believe that it will be if HR continues down the current path of making SWP yet “another HR program” vs. a strategic business process that helps leadership ask and answer the critical questions needed to ensure they have the right people, in the right roles, at the right time and cost to execute the business strategy.