Strategic workforce planning (SWP) remains a largely under-exploited opportunity for both the enabling and de-risking of business strategy execution and the establishment of HR as a key strategic partner. I have now worked, researched, written and spoken about the topic for nearly a decade. Over this time, I have worked with over 30 blue-chip organisations on delivering SWP and also upskilled large numbers of people in SWP practice through in-house, public and business school programmes. Despite their diverse context and cultures, what I see are organisations encountering the same broad set of issues in implementing SWP. Many of these challenges are self-inflicted and could be avoided. Here I set out five key pitfalls to avoid in order to maximise the chances of adding real business value through SWP:
- Avoid positioning SWP as a separate or HR process and instead position it as the ‘third leg’ of a business’ strategic planning process and seek to integrate with existing business planning processes from the start. You may not need to call it anything!
- Don’t be afraid to use the word ‘risk’. SWP is, in essence, about identifying and mitigating people and organisational risks to strategy execution. Risk is a core language of business
- Don’t position SWP too narrowly (for example, just about critical roles or headcount) or as a discreet, one-off activity. Instead, consider it as an end-to-end journey, where breadth and level of detail change along the way
- Resist trying to force SWP to numbers too early or confusing it with resource forecasting. Instead recognise that business value is unlocked not by rushing to answers, but first through recognising what are the right questions
- Don’t involve the wrong people or make a single individual accountable for SWP outcomes. Successful SWP requires cross-business involvement, the ability to deal with ambiguity and high-level facilitation skills
I can’t help thinking that organisations waste a lot of effort positioning SWP in entirely the wrong way – often as an HR process or a bolt-on one-off process that the business must be persuaded to undertake. The fact that we have coined the term ‘SWP’ doesn’t help us. My own experience is that it is mainly HR who use this term, whilst the leaders of businesses talk of ‘organisational capability’, of ‘risks to execution’ and of ‘confidence that the organisation can deliver’. So, have we missed a trick? Isn’t what we call ‘SWP’ simply the people and organisational dimension of strategic planning? Since this is something that businesses already do in terms of the ‘hardware’ – matching demand against product and service offer development, supply capability and financial restraints – why position the people and organisational element separately?
Why not talk of SWP as the missing ‘third leg’ of strategy formation and execution planning? So many strategic execution failures are due to mismatches between strategy and organisational capability. Isn’t it just common sense to expand the strategy discussion from 2-dimensional to 3-dimensional?
If we do this, do we even need to call it something different? Many of the challenges that we have getting the wider business over the line on SWP seem to stem from this fundamental mis-positioning and confusion. The starting point for SWP is not the filling in of a spreadsheet asking for predicted FTE in different job families in five years’ time. It is the inclusion of thinking that is all too often missing at strategy level. Thinking to sit alongside, support and improve the quality of thought that is already happening.
If this gap is not rectified, strategy is allowed to progress into the execution phase without important key risks and opportunities having been considered early enough. These issues – new skills needs, structural sub-optimisation, behavioural needs, retention, performance, leadership etc – then crop up some way down the route. It may well be that they can be addressed, but if they can’t, strategy will be diluted, delayed or even blocked. Since many of these needs will have landed within HR’s delivery remit, it becomes very hard to avoid the function appearing reactive or disconnected in this scenario.
Take the example of the financial services organisation whose entry into Eastern Europe was delayed significantly and at great cost due to issues obtaining licenses to operate. This was driven by not recruiting or contracting with key individuals in the region, who had both the knowledge and the necessary connections. SWP thinking should have identified this as a risk and a strategy developed to ensure that these individuals were brought to the party early. Or perhaps the increasing number of examples of organisations with a digital strategy who have discovered only during recruitment efforts that they did not have the employer value proposition to attract the talent they needed. This could easily have been identified as a predictable risk, and a strategy to mitigate developed.
Positive examples of SWP thinking include the largescale infrastructure project which used SWP thinking and subsequent modelling to identify the risk that other concurrent national infrastructure projects were likely to suck up too large a proportion of the resource they had previously assumed could be recruited, and as a result took steps to invest in developing their own in-house supply of talent over the next few years. Another is the global engineering business that switched to a M&A model based on predicted capability gaps thrown up through SWP. How about the chemical business that poured investment into universities to develop more chemical engineers, or the mining company building schools in Sub-Saharan, Africa to build the talent of the future?
If we are positioning SWP as something that improves the effectiveness of our business planning processes, then it also makes sense to talk about risks and risk mitigation.
Business talks about risk every day. I feel that we in HR sometimes don’t talk about it nearly often enough. Sometimes the ‘R word’ is considered unduly negative somehow. Yet risk is a subject that has the power to unite the worlds of commercial business, people and organisation. It is at the very heart of how business operates. Is it not, therefore, sensible to take advantage of this? By looking at what an organisation is trying to achieve over time, translating this to potential implications in the people and organisational space, identifying where potential gaps exist, understanding where these gaps may represent risks requiring mitigation, and then developing and implementing strategies and activities to address them; isn’t SWP acting as any other scenario-based risk management process?
If we want our leaders to be engaged in forward thinking about people and organisation, we need to position it in language they understand. By positioning SWP as a means of managing risks to strategy execution, which connects strategic objectives with the activities to deliver them, why would our leaders not want to be involved?
The knock-on benefit of a risk-based approach is that it focuses the organisation on a smaller number of more important things, making it easier to align limited resources to focus on agreed priorities.
It also allows us to align people processes horizontally and vertically to deliver what is needed both effectively and economically. One example of this is talent segmentation. If we have robustly identified specific skills which we believe we will need, yet may struggle to develop or attract, we have a means of targeting our EVP (Employer Value Proposition), supply partners and wider processes on specific talent segments as opposed to spread-betting.
Another major influence on failing to establish SWP is the way in which we talk about its scope and nature. There is a clear confusion and lack of consistent definition around the way that we describe SWP. Sometimes we see a headcount-oriented interpretation, sometimes one based around critical roles, sometimes one based around workforce mix and profile over time. More often than should be the case, there is a clear confusion between what is badged as SWP and ‘resource forecasting +’. Is it any wonder that we struggle to engage our businesses in the concept if we are not clear on it ourselves? None of these interpretations are necessarily incorrect, but at the same time, they are simply sub-elements of SWP and none of them properly represents its entirety. They are simply ‘snapshots’ of different stages in an end-to-end SWP journey. SWP does not replace operational planning. It simply gives it the necessary context to focus it on the right things and ensures that we have covered all the bases.
The reality is that we need to talk about SWP as a journey with different stages. In practice, each of these stages will have different character.
The journey starts in the cloud-shrouded mountains, where certainty cannot exist and strategy itself is still a fluid and forming entity. As we start our descent toward the valley floor, we first see some of the concepts and questions taking more shape, but still there are no answers, no numbers. But there is enough to explore different scenarios, different workforce and organisational concepts and to begin to understand some of the needs and gaps at high level.
Further down on the descent we are able to perhaps model or analyse some of these questions, to help refine and expand our understanding of the need and the potential gaps or surpluses. Now some of the clouds are clearing and we are able to get our first glimpse of some of the key needs and risks. We can begin to strategise about how we could tackle them.
As we continue downwards toward the valley floor, we meet roads and infrastructure coming up to meet us. As we hit the familiar feel of tarmac and habitation, we can connect this upstream thinking with our downstream infrastructure and understand which routes should best be followed. We understand the options and road network, but armed with a clear view of destination, we can plot the most effective route.
As we level out on the valley floor we are now in implementation, but one where our route is shaped by our learnings right from the mountain peak. SWP has done its job and been picked up by, and replaced by, our operational planning processes and people process delivery. It has melted away, leaving its mark in terms of the alignment of strategic need and activity, remaining only as a map against which to check our progress.
SWP has a different nature at various stages in this journey.
- Strategic translation – the start of the journey, right up in the mountain peaks among the clouds, often termed ‘strategic dialogue’. Here, the nature of SWP is facilitative and consultative. It is helping to provide a framework to translate from what is known about the strategy, to what it might mean in terms of people and organisational implications. There will be no numbers, no precision, no certainty; but the opportunity is to get a top-level sense and shape of the challenges and opportunities which, with some further work, can be further refined into potential gaps and risks to explore. Often workshop-based and supported by the use of scenario planning and established organisational system frameworks such as 7S, Galbraith etc
- Risk identification – taking these top-level inputs and conducting further work to understand whether or not these should be treated as priorities. Looking to data and other sources of insight as to current capability, external trends, talent availability and the ease or difficulty of closing gaps. Exploring the likelihood and potential impact of different scenarios. The aim being to identify the organisational big-ticket areas where simply letting them run their course with business-as-usual processes represents too great a risk. These will still not be answers but will represent the key questions that must be answered. They may relate to specific talent acquisition challenges, new leadership requirements, cultural needs or organisational structure change to name but a few elements. It is this view of priorities which will now guide the downstream activities and approaches
- Modelling/Analysis – at this point, there may be enough solidity for SWP to move into an analysis or modelling phase. Using analytical tools from simple spreadsheets through HRIS through to proprietary SWP modelling software, different organisational and workforce scenarios can be explored. This allows us to size any potential risks or opportunities, and also to experiment with different approaches to addressing them. This kind of analysis can help us understand the impact on a need of changes in workforce mix over time, of age demographic, of changes in the size of talent pools and of potential workforce cost. SWP does not depend on the ability of an organisation to model like this, but it can help enormously both in creating engagement in the issues and in defining the strategies to address them
- Strategy development – the identification of the most appropriate strategies to meet these needs or risks. This is the connection with the familiar world of build, buy, retain, rent and redeploy. The ‘answers’ zone, now focused on addressing the right questions. The most appropriate route to addressing a need might be anything from some focused brand-building and recruitment activity to an ultimate decision to acquire another business. Emerging strategies must be compared with existing organisational plans and people strategies to ensure congruence and relevance, and any necessary amendments or re-prioritisations made. Are our people processes fit for delivering against these needs, or do they require modification? We have now bridged the gap between SWP and the detail of HR strategies and activities. We have also found the ‘glue’ that brings together the different elements of HR and unites them, along with defining a core function of the HR Business Partner role in supporting this translation
- Operational planning & implementation – catalysed and informed by SWP methodologies, our operational plans are now configured around doing the right things at the right time and in the right way. We must now follow them through and execute strongly upon these plans. We have passed through the threshold beyond which we are able to engage with numbers and specificity, and are using our operational planning tools to load the right ammunition into the organisation at the right time
- Measurement & review – the fact that we have been able to articulate our view of key risks means that we have a basis for reviewing the degree to which they are being mitigated. SWP, if done right, tells us what we need to measure. It is the difference between measuring attrition across the whole population and measuring attrition in strategically important talent segments in specific locations. It allows us to move from information to insight in terms of the data we interrogate and present. SWP will also be dynamic, because strategy evolves and because internal and external influences shift. Being able to review and update your SWP, and connect this back to the wider business planning processes described earlier, provides focus and sustainable relevance as well as a sense of progress and clear accountability
As we progress on this journey through the different phases of SWP and avoid pigeon-holing SWP to just one step, we must also resist the temptation to think of it too narrowly. If we sign up to the benefits of SWP as a risk management approach, then we must ensure that our start point is not too narrow that we miss something.
Many approaches that I have seen try to move quickly to critical roles, job families or simple headcount. There is benefit in our start point encompassing ‘organisation’ fully and exploring the interdependencies between its different dimensions. By this I mean a starting definition that spans, for example:
- Operating model and organisational structure, physical locations, facilities, overall workforce size, roles and responsibilities
- Systems and processes directly or indirectly influencing what is needed both at business process and people process levels
- Skills and knowledge required to maintain or develop competitive advantage
- Behavioural needs to move towards cultural goals and to lubricate change
- Leadership and engagement requirements. How what we may need from our leaders may need to change, along with the ways in which we motivate, recognise and protect the well-being of our employees
As we explore, refine and develop the SWP conversation, we can focus the implications on specific elements such as roles and headcount, but we risk missing key needs if these are our start point.
This is the reason that I encourage the use of an organisational system framework. You may have one that already has currency in your organisation or be familiar with one of the many established models. It matters less which one is used, and more that the right questions are asked. It is frequently through doing this, and contemplating how different elements interact (for example, culture and leadership) that we gain our most powerful insights. Below is an example framework that I use to help guide the questions asked.
Hopefully by now we can see that starting with a spreadsheet asking how many Java programmers we need in Belgium in 2023 is part of the problem, not the solution. We cannot force SWP into numeric form before it is ready, yet equally, we cannot wait for this to happen before we act. I term this dilemma ‘bigger spreadsheet syndrome’ and it frequently results in an unhealthy stand-off between HR and the wider business.
It is this dilemma where I see a common cause of failures to get SWP off the ground. Either we disengage the wider business by asking for something which cannot be provided, and if it is, cannot be trusted if we have not asked the right upstream questions; or we only pick up the process when it is too late to do anything to address major risks.
With this approach it should be no surprise that SWP is not seen as offering tangible value. Yet it is a common issue because it plays to our comfort zone as human beings. We prefer certainty to ambiguity, black to white, ones to zeros. This tendency for process and accuracy also results in a common misconception that engaging with SWP means stopping the strategy train, and even reversing back into the station. This is not true. SWP thinking does not need to coincide with the conception of strategy, and this opportunity rarely if ever exists. It can be applied at any point, often effectively positioned as an in-motion ‘health check’ or ‘validation’ to ensure that we have thought about the right things. What is true, is that the nearer the point of strategy creation that it occurs, the better.
In today’s Volatility Uncertainty Complexity Ambiguity (VUCA) world it is highly unlikely that these luxuries of clarity and due process will be available when we need them, so we must be able to engage at higher level and work with unformed and moving needs – tuning the engine of the car as it moves down the road.
It is this need that gives rise to my last pitfall of note to avoid – that of involving the wrong people. This has two dimensions: the capability of the individuals involved, and the breadth of the knowledge brought to bear.
If you are the kind of person who likes certainty and a nice neat process, then the upper reaches of SWP will neither play to your preferences nor your strengths. If you like to act on clear instructions from above, rather than take the lead in guiding business leaders to new insights; then again, you may be more effective joining the SWP journey nearer the valley floor. SWP’s real value is won or lost in the mountains and clouds, so it is vital that those supporting the approaches in these areas are both comfortable with ambiguity and pragmatism, but also highly skilled in consulting and facilitation approaches. Using the wrong people in the wrong place is a sure-fire way to scupper your SWP efforts.
Neither should SWP success or failure rest on the shoulders of just one individual, even if they possess these attributes. Successful SWP is characterised by cross-functional groups – HR, Finance, Business Planning, Supply, Marketing etc – working together to co-create SWP insights and priorities. Sure, this makes sense to be led from HR, but remember that it is a business activity, not just an HR one.