Link - Fasten Your Seatbelts: Workforce Planning for a Turbulent Economy

Fasten Your Seatbelts:
Workforce Planning for a
Turbulent Economy
Bill Link, J.D.
Leadership Partner, Gartner’s Enterprise IT
Leaders for HR Professionals Client Program
HR Florida State Council Associate Faculty, University of Phoenix,
August 31, 2010 Central Florida Campus & UoP Online

bill.link@gartner.com
whlink1@email.phoenix.edu

Changes in formal workforce planning
assumptions

Traditional workforce planning Portfolio approach to
workforce planning
 Extrapolation approach to  Scenario planning creates
replacement planning options for changing economic
 Assumes scarce skills will conditions
remain hard to fill tomorrow  Flexibility is fulfilled short-term
 Assumes today’s jobs will be by external suppliers
similar to tomorrow’s  Labor supply changes create
 Changes in workforce are longer term opportunities
filled as vacancies are
approved  Changes in workforce mix
require early planning

© 2010 Gartner, Inc. All Rights Reserved. 2

New Concepts/Approaches/Tools

 Portfolio management approach to workforce
management
 Opportunity readiness capability
 STEEP component (social, technological,
economic, environmental, and political factors)
 Four levers of workforce planning (business unit
services, state of technology, business unit
processes, and people)
 Organizational network analysis as part of the
―people‖ lever

Definitions
 Portfolio Management – This is methodology for analyzing and
collectively managing a group of current or proposed
projects/resources based on numerous key characteristics. The
fundamental objective of the process is to determine the optimal mix
and sequencing of proposed projects to achieve the organization's
overall goals best, while honoring constraints imposed by
management or external real-world factors.
 Workforce Portfolio Planning Approach (“WPPA”) - WPPA
compares and contrasts workforce strategies, and how to implement
them, in a variety of contexts. This approach allows business leaders
to mitigate radical shifts more with more agility by pre-identifying
competing priorities, and determining the resources the organization
will need to source and implement.


Workforce portfolio planning improves economic
resilience

Workforce portfolio planning is a combination of scenario-
based assessments and plans

Resource projections:
Matching business/business unit (“BU”) outputs Workforce portfolio
planning helps
and workforce requirements/availability
lessen the possibility
that BU leaders will
Investments in people: miss the
Prepares people for structural, skill and role opportunities that
scenarios economic cycles
bring and that can be
catalysts for
Sourcing possibilities: desirable change.
Situational-based options for sourcing


Portfolio strategies according to time frame and
financial resources

Process improvement Distributive strategy creates
High growth
Look for, and invest in,
opportunities now to get existing Develop, source and reward
work done more efficiently increased capability/skill depth to
take on new value-creating work

Financial Survival through consolidation Agility through breadth of skills
resources
Review work structure so that Do more with less by building a
essential work can be done flexible workforce with emphasis
through less people on breadth over depth of skill

Low

Short term Time-frame focus Long term


Adapting to economic changes brings structural
and behavioral change
Downturn strategies Upturn strategies

Consolidation Distributive strategy
 Centralized restructuring  Innovation
 Regional centers  Entrepreneurialism
 Core skill building  Virtual teams
 Direct report leadership  R&D focus
 Centralized accountability  Matrix structures

Process improvement Agility
 Reengineering  Flexible behaviors
 Cross functional training  Skill interchangeability
 Work elimination  Knowledge transfer
 Clarified accountabilities  Shared ownership
 Reduced duplication  Multiple sourcing
 Process focus


Portfolio planning analysis

Economic upturns

1. Analyze the STEEP factors that impact workforce plans
2. Assess the opportunities/threats of economic change
3. Conduct workforce strengths and weaknesses analysis
4. Incorporate four-lever analysis into the people review

Economic downturns


Tool: STEEP analysis

Social factors

Consider the trends against
Technological factors
each of the STEEP factors. For
each trend consider the
possible outcomes and
Economic factors
financial, regulatory and
workforce implications for the
Environmental factors business and its competitors.

Political factors

Create three to five mutually exclusive what if scenarios that reflect probable
vs. possible and best- vs. worst-case scenarios that range from extrapolation
from the present to significantly different scenarios. Consider the
implications of each for workforce planning.


Assess readiness for the next economic
cycle
Are you ready for the ups Upturns
and downs of economic
change?

Do you have ….

A culture of innovation and high
performance?

Performance recognition systems?

Efficient processes?

Core skills and talent?

Open communication?

Clear accountability? Downturns

Tool: SWOT analysis
Strengths, Weaknesses, Opportunities, Threats
Strengths Weaknesses
What resource requirements are well What resource requirements are poorly
covered internally? covered internally?
What investments in employees can be What investments in employees are too
made now? resource-intensive?
What current work is best sourced What current work is best sourced
internally? externally?

Opportunities Threats
What new resource requirements exist? What new resources are under-filled or
What investments can be made to meet unavailable?
future and new BU needs? What investments are not worthwhile?
What future work is best sourced What future work is best sourced
internally? externally?


Tool: Four levers of scenario planning
Lever for cost Identify considerations
management
1. BU services  What services does each BU offer?
 What must be sustained and what can be cut?
2. State of  How can technology be simplified?
technology  What applications are no longer needed?
3. BU process  How can processes be simplified?
 What processes should be reviewed?

4. People  What are the risks of reductions in force?
 Where is investment most needed?
 What Is the minimum staffing level?


Using what-if scenarios for planning
Degree of radical response

Scenarios
Scenario 1 Scenario 2 Scenario 3
Federal stimulus creates Redistribution of Revenue fails to keep up
greater opportunities funding ensures that with expenditure
through infrastructure critical services and/or resulting in drastic cuts
investment investments continue

Workforce implications Workforce implications Workforce implications

 More jobs  Process redesign  Consolidation of work
 Learning opportunities (gradual job reductions)  Learning by doing
 Superior rewards  Learning to stay current  Pay frozen and potential
 Career growth  Competitive rewards cuts
 High security  Career preparation  Careers stilted
 Comparative security  Low security


Chinese symbols for initiating change

Danger? Opportunity?

CRISIS

The symbols for crisis in Chinese consist of two words, pronounced wei ji.
Wei means danger and ji means opportunity. So literally, wei plus ji equals
―crisis,― and this is an alert that change must be expected. See a critical
interpretation of this translation at: http://www.pinyin.info/chinese/crisis.html


Examples of opportunities in response to
economic shifts

Opportunities include:
Economic shifts:
 Filling long-unfilled skill gaps
Changing customer priorities

New trends in skills availability  New business that requires BU
input
Shifts in labor costs
 Replacing costly outdated systems
Changes in labor turnover trends
 Hiring in contractors

 Reducing voluntary turnover


Create opportunity-readiness capability
Creating
opportunity readiness
Opportunity-ready
Being in the right place at the capability
right time to gain investment is
not serendipitous, but the fruit Review selection/
of building opportunity- sourcing approaches
readiness standards.
Define higher standards

Build workforce/sourcing planning capability

Determine the continuing contribution of BU

Plan requirements


Aligning organizational needs with individual
aspirations that transcend economic change

Organizational needs Individual aspirations

Succession capability Career development

Superior performance Reward, recognition, job security

Capability Skills development

Agility Work/life balance


Keep both eyes on talent needs
Keep one eye on Keep the other eye on
current talent needs future talent needs

 Focus sufficient resources on  Determine what new technologies
business-as-usual and survival will require resources
 Assess breadth and depth of skills  Stay in the market for scarce skills
 Determine career paths/structure  Build integration skills that enable
requirements agility

During economic change, work closely with specialist recruiters to find
scarce talent that can help drive growth (upturns) or fill voids in skills
(downturns). Be open to hiring or contracting in affordable, rare and
superior talent regardless of economic cycle and headcount vacancies.


Network Analysis is part of the “People”
piece of Workforce Planning

Networks are the
webs of trusted
relationships that
people forge to
perform work.

Network Analysis slides used with permission of Maya Townsend
www.partneringresources.com 617.395.8396

© 2010 Gartner, Inc. All Rights Reserved.

If This Is The Organization Chart…

Paul

Jane

Jane is at the individual contributor
level on the org chart

© 2010 Gartner, Inc. All Rights Reserved. Presentation © 2008 Partnering Resources. Image: Gartner, Inc. Used with permission.

…Network Analysis Shows How
Work Really Gets Done
Jane is at the center of this network—10 people
work directly with her, as indicated by the solid
lines

Silo 2
Silo 1

Jane

Silo 3
Without Jane, the organization
fractures and forms three silos

© 2010 Gartner, Inc. All Rights Reserved. Presentation © 2008 Partnering Resources. Image: Gartner, Inc. Used with permission.

Benefits of working virtually through
economic cycles

Virtual working can help
In down times when striving for:
 Productivity
by:
 Ways to do more with less  Enabling teams to work with
 High performance common tools and processes
 Sustaining innovation without physical/status
 Continuous improvement barriers
 Opening up the office 24/7
 Reducing office costs
 Providing work and learning
In up times when striving for: tools
 Skills growth  Improving communications,
 Innovation especially through social
 Big bang change networking techniques
 Well-managed investment  Providing work/life balance
 Retention/attraction of talent


Maximize economic upturn opportunities within
a workforce portfolio plan

Upturn responses:
Upturn Issues:
 Seek/grow new skills for new
 Competition and retention tasks
 Balancing breadth and depth of  Virtual teamwork for expansion
skills  Look for/grow breadth and
 Rewarding performance and depth of skills
benchmarking compensation  Invest in career growth
 Meeting demands for career and  Provide performance/retention
learning opportunities incentives
 Invest in continuous learning
 Align incentives with
performance/marketability
 Stretch assignments/task forces
that drive innovation


Minimize economic downturn risks in a
workforce portfolio plan

Downturn responses:

Downturn Issues:  Protection of core skills base
 Organizational consolidation:
 Protecting/growing core skills processes and structural redesign
 Retention of agile, inter-changeable  Virtual teamwork
skills  Career coaching
 Acknowledging success without  Recognition
using dollars  Stretch assignments for learning
 Providing learning opportunities  Agility and breadth of skills:
 Finding funds for scarce skills should Flexibility/cross-training/job
they increase in availability rotation
 Recruitment partnerships to find
hot skills/scarce talent as
availability increases


Questions?

Bill Link, J.D.
Leadership Partner, Gartner’s Enterprise IT Leaders for HR Professionals Client
Program
Associate Faculty, University of Phoenix, Central Florida Campus & UoP Online
bill.link@gartner.com
whlink1@email.phoenix.edu


Additional Reading
Gartner Report for HR Professionals. (2009). Fasten your seatbelts: workforce
planning for a turbulent economy. (electronic copy provided with permission
of Gartner)
Townsend, Maya. (2008). Organization network analysis: uncovering the hidden
relationships that drive performance, learning, and change. (electronic copy
provided with written permission of the author)
Townsend, Maya. (2008). The seven hidden networks: the webs of relationships
that power the corporation. (electronic copy provided with written permission
of the author)
Townsend, Maya. (2010). Measuring the intangible: how the national braille
press evaluated culture, collaboration, morale, impact of restructuring and
more. (electronic copy provided with permission of the author)
Townsend, Maya. (2008). The three most important roles that you don’t know
about . . . yet. (electronic copy provided with written permission of the
author)


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