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A Step Forward
It shouldn't come as much of a surprise that workforce planning will be a major theme at this year's HR Technology® Conference. To be sure, the business process is hardly new. But thanks to the advent of new software, companies are finally able to do it in a meaningful way. Ed Newman, president of The Newman Group in Los Angeles, recently described workforce planning as "one of the most strategic and impactful activities HR can engage in to help clarify the return on human capital investment." So it stands to reason this is a subject HR leaders have a keen interest in learning more about. At the 2009 event, Newman will be joined by Marsha Johnson, Southern Co.'s senior vice president of HR and chief diversity officer, to explore the best way to go about selecting a vendor and implementing a workforce-planning solution. Though it's still a story in the making, Johnson will detail the Atlanta-headquartered electric utility's early successes and lessons learned. The two will be joined by Peter Louch, CEO of New York-based Vemo Inc., whose software was ultimately selected to assist in the process. Human Resource Executive® Editor David Shadovitz recently spoke with Newman about his take on the rapidly evolving workforce-planning landscape and what HR leaders need to consider as they look for solutions and implement their plans. Newman also provides a quick overview of what he and his co-presenters will be sharing at the session, scheduled for Wednesday afternoon, Sept. 30. For the past 10 years, Newman has consulted with companies in a variety of talent-management areas, including workforce planning. Clients include Johnson & Johnson, Accenture and Wellpoint. Prior to starting The Newman Group -- which is now part of Futurestep, a unit of Korn Ferry -- he held several leadership positions at Spherion and R.D. Raab & Co., where he managed the recruiting function for SAP America. He also served as director of employment and corporate HR for PRC Inc., which was later acquired by Northrop Grumman.
There are a lot of different definitions of workforce planning floating around. Why is this the case? That's a very good observation. You can ask 10 different people what workforce planning is and get 10 different answers. I think the reason is that it is such a broad area. Workforce planning is really about looking at the direction of the business and evaluating how well the workforce stacks up and aligns with that direction. What are the gaps? What changes do we need to make? The workforce-planning process has been well-defined and we don't necessarily need to reinvent it. It's about defining what you're planning for. You do a supply analysis, a demand analysis; you identify gaps and then draw up strategies to close the gaps. The challenge is [on the] demand side. Because you're trying to predict the future and evaluate where the business is going, it's a lot harder to do than a lot of traditional HR practices. There's a tendency to maybe skip over that part, to focus more on our internal statistics and look at our historical trends, our hiring trends, our turnover trends, and try to predict the future based on that.
How would you define or describe workforce planning? We sort of break it into three buckets. There's traditional workforce planning that almost every company does. That's around what their budgeted head count needs to be for the coming operating years. Companies make projections as to where they're going to go in the next year, maybe two years, and then they apply some financial numbers to that to determine what that means in terms of head count. The intermediate level is where they start getting more into some data relationships. This is where companies can do a lot of one-off analyses, which I would still classify as workforce planning. The most common intermediate-level analysis is what the impact of the aging workforce is going to look like. How many people do we have who are retirement-eligible? Those predictions are changing right now due to retirement funds being much smaller than they were a couple years ago. So companies are now trying to figure out what's the real attrition going to be due to retirement. The most advanced level of workforce planning is what we call strategic workforce planning. That's where the business strategy is the main focus and [companies are] looking at the business objectives ... and then looking at the workforce, segmenting it into roles that are very critical and roles that are not so critical ... and then planning for each segment. In general terms, organizations have been moving from the traditional level toward the advanced level. The biggest challenge in getting there is solving the data problem. There's been a lot of automation over the last decade or two [that has resulted in some meaningful data]. The challenge is [the data] may be in disparate systems. But we're starting to see some new tools emerge in the market that are solving that data problem.
Could you summarize what you're planning to cover at the HR Technology® Conference session and what's noteworthy about the Southern Co. story? I think Southern Co. has a great story to tell. The utility sector is definitely undergoing some major changes. Utility companies, in general, are known to have very long tenure. Southern Co. is no exception. They have an average length of service for certain segments upwards of 20 years. So they have a big challenge with eventual retirement. It's something that they've been talking about probably for the last 10 years, where they would say, "Yes, we definitely are seeing this [happening], but we have a little time." Now they're getting to the point where they're running out of time. They're going to need to figure out how to replace that talent. Marsha Johnson will be presenting with me. She's been with Southern Co. herself for 25 to 30 years, rising through the ranks and now heading HR, and absolutely sees this as a major business issue. There were pockets, various business units, engaged in doing workforce planning. The problem was there was no way for them to bring that activity into any kind of enterprise view. Marsha will be telling Southern Co.'s story, the challenges they're facing and why this is such an important initiative for them. Then I'll go through [the process we used] to get the different business units aligned to the business requirements and to canvas the market for the tools and technologies that we could use [for workforce-planning purposes]. The third component of the session will be Peter Louch, who is the founder of Vemo. Vemo is the solution that was selected by Southern Co. Peter will talk specifically about how his application was applied to some of the specific needs of Southern Co. We'll then circle back to Marsha, who will talk about implementation from an organizational-change perspective.
You alluded to vendor selection earlier. What's the best way to handle vendor selection, considering the vendors tend to be few in number and relatively new? It's really no different than any other area of HR, with the exception that [with workforce planning] there tends to be more visible differentiators. Right now, it's not a mature market. When it gets mature, you have to be real careful because there are all of those me-too solutions; they tend to start looking a little bit alike and you really have to dig down deep to see the differentiators. So in this case, it wasn't as hard to identify the differences; they tend to stand out a little bit more.
What's the vendor landscape look like today? [In the pure-play group, you have vendors such as] Vemo, Aruspex and Infohrm. Infohrm was heavy into the analytics, but has emerged very strong in workforce planning -- so we categorize them as a pure play. I think that Aruspex and Vemo founded their businesses to address workforce planning. There's also a lot of movement toward workforce planning among some of the talent-management suite vendors. Then there's the entire set of analytics providers, Cognos, Business Objects and the like. So there's definitely some breadth in the market. In the analysis we did with Southern Co., I think there were about seven or eight companies that we looked at.
How do you think the vendor landscape will change in the next few years? Like other emerging areas, we're going to see some proliferation and consolidation, maybe simultaneously. It's possible that some of the suite providers may look to acquire one of the [pure-play vendors], but it's still kind of early and I don't know if they're ready to take that risk just yet. If you go back to the applicant-tracking market when career portals came out as a separate product, within two years of that happening, applicant-tracking systems had [these portals] as part of their product. So that whole category kind of went away. ... We could see that, with workforce planning, although it's a broad enough and complex enough function, I think it's more likely to stay separate and we're likely to see new entrants into the market.
For those employers that have taken the plunge and embraced workforce planning, what tends to be the biggest mistakes they make? I think it's still early, but there definitely are some lessons learned. One is trying to do too much; boil the ocean. If there's an attempt to do too much, it tends to lose steam. Also, it can't be just an HR initiative. If it comes across as just another HR initiative, the tendency is for it not to be accepted. To be successful, it really has to be connected to the business and [business leaders] need to be engaged.
What steps should HR be taking to get traction? [One way is to go to] the top and get their buy-in first. Or you might take a division or a department that is most prone to embrace this kind of thing ... and start there. [In that scenario], you need to begin with some education and get the different stakeholders together for maybe a workshop and make sure that everybody's understanding what we are talking about. The pilot approach gives you the ability to say, "We've got a business case that says we can have organization impact if we do this on an enterprise level." I call this approach "seed and feed."
Do you think HR "gets" workforce planning? I have been talking about this stuff for four years and I don't know many people who don't get it. It's more they get it and then they say, "Yeah, but my organization doesn't want to hear it." It's easier said than done when you're dealing with organizational politics. Those are the barriers that need to be broken down. If I'm an HR executive and we don't have an HR function that's viewed as a business partner, and all of a sudden I show up on a business leader's doorstep and say, "Hey, can you show me your business plan?" they're going to respond, "Well, who are you, the police? Why are you asking for my business plan?" That's why it's important to identify a business leader who is most likely to say, "Yeah, let's do this." If you can create a success story there, then you can get the attention of the powers that might say, "Hey, we're doing this. Get on board or get out."
Do you have any final thoughts for HR executives who are looking to take workforce planning to the next level? There's definitely a growing knowledge base out there, including a growing number of white papers and data available to find out how others are doing it. It's showing up at conferences like yours. I would encourage HR executives to do the research and see why workforce planning is one of the most strategic and impactful activities HR can engage in to help clarify the return on human capital investment. Any company that's looking to do talent management, which just about every company has at the top of their list, needs to do a better job of integrating talent management. Workforce planning is the activity that enables it.
September 2, 2009 Copyright 2009© LRP Publications |
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