Workforce Planning and the CEO

Workforce Planning is the hot topic right now.  A recent PricewaterhouseCoopers study underlines the importance CEOs are putting on having a talent strategy for their organization. Over 95% of CEOs say that access to and retention of key talent is their number one priority.

But I have to say that I have not seen much happening with my clients, colleagues or fellow HR practitioners.  Most of the current focus seems to be on layoffs, restructuring, and some limited hiring. A few are concerned with retention over the long term, but for now even that seems to be of minor concern.

So why the disconnect?

I think there may be three major reasons that the concern of CEOs has not penetrated HR. First of all, many HR practitioners haven’t seen any demonstration that the CEO is concerned. Nothing has trickled down to them.  The word from the top is still about reducing head count and improving productivity.  I hear of major hiring freezes still firmly in place.  Turnover of employees is generally regarded as a plus because it reduces head count.  Rarely does anyone look at whether the person leaving occupies a strategic position or, if someone does look, they have very little in the way of incentives to entice them to stay. Most layoffs are not strategic but are designed to lower costs by targeting higher earning employees. The bottom line is that the espoused concern of CEOs is not being communicated or translated into action.

Figure: Simplified Diagram of a Strategic Workforce Plan

The second reason  is that HR has not made much of a case for taking a strategic look at the workforce. At IBM, Dupont and few other organizations there has been significant progress in looking at future workforce needs and skills.  They have made extensive analysis of the current workforce and the skills it has and have mapped those skills to perceived emerging needs. People with the skills that will be needed are then given development opportunities and are removed from any layoff category regardless of pay level.  On the other hand, people who lack the needed skills are either retrenched or given development opportunities to prepare for the eventual improvement in business.  But this type of thinking is rare. 

HR is still mostly composed of administrators and “pair-of-hands” people who do as they asked. In twenty plus years in HR I have only known a dozen of so HR leaders who fall into the strategic category. This will change dramatically as we emerge from the recession.  Most organizations will be smaller and more tightly staffed which means that everyone will have to be generating revenue or contributing in some way to the bottom line.  Many administrative and transactional jobs will be outsourced or automated, reducing head counts even further and leaving behind employees who can look at the big picture.

And finally, we haven’t seen much happen yet because everyone from CEOs to workers are in a reactionary, survival mindset.  As things slowly improve, which they already are, this will begin to change.  CEOs will start asking for a skills map of the current workforce and they will be concerned about  how they will meet product development goals, customer needs and global markets with the current employee base.  Smart HR people will have a map of those skills and will be well versed in possible business scenarios the organization may find itself in and have a recommended people strategy for satisfying the skills needs of those scenarios.

Having a strategy for acquiring, developing, engaging and measuring the success of your workforce will be requried for organizations to thrive in the new economy. We know how to create such a strategy and we have the time. This is the golden opportunity to act and it seems almost a crime to do nothing when every sign points to the need for a talent strategy and a business plan to go with it.