Global

KPMG’s 10 Steps to Strategic Workforce Planning 

Globalization. Mobility. Talent Management. These three concerns consistently make the top of the list for most CEOs and CHROs. All three areas are underpinned by one core activity; workforce planning. KPMG has helped many clients through the workforce planning process and we have developed a practical framework that the HR professional can use to create a strategic workforce plan that reflects the needs of the business.

We believe in evidence-based approaches to people management starting with these 10 steps.

Share this
Preparation – Data Collection Action – Modeling the workforce Incorporation – Implementation and Integration
01
Review organization strategy

Definition

Organizational strategy is the goals and objectives of the business operating unit for which the planning activity is needed.

Key Activities

Clearly understand why workforce planning is needed; summarize all hard people-related measures outlined in documents; summarize the soft measures. Documents to review include vision and mission statements, organizational performance plans, financials and budgets, organization charts and studies, staffing plans etc.

Organize a multidisciplinary team to conduct planning (HR, Finance, Budget, Unions and Business Leaders etc.).

Gather data for the "big picture: strategic plans, current and projected budget information, external market data/trends.

Create a set of assumptions to set the scope of the planning effort including:

  • Focus of Plan (key roles, unit, function or organization; high turnover or declining performance areas)
  • Number of years to project (2-5)
  • Workforce characteristics such as permanent, temporary, FTE, non-FTE, contractors etc.
  • Diversity and cultural issues making sure barriers are not being created
  • Baseline financials (annual and projected budgets, headcount).

Document background and rationale.

Beware of …

Too broad of a view will become overwhelming; start small with specific key positions or occupations.

Helpful Hints…

Interview Senior Executives and Business Leaders to gain their buy-in and ensure that they understand the importance and value of the planning exercise.

Align the Workforce planning cycle with the strategic planning cycle.

02
Research internal labor market

Definition

Also known as workforce segmentation; summarize key Workforce or resource pool 'characteristics' of the group in scope.

Key Activities

Collect the "people" data for the group in scope (headcount, titles, grades, performance ratings, qualifications, tenure, age, race, compensation, benefits etc.).

Create a current workforce profile; number, turnover, location, demographics (age, gender, race), competencies, job levels , education, certifications, status (FT/PT).

Validate findings with managers and business leaders.

Beware of …

Missing or bad data; don't make it up – make reasonable, conservative assumptions around gaps; be consistent.

Helpful Hints…

Validate your findings as you go; a surprise in the baseline will undermine credibility in the long run.

Make sure you understand the employee lifecycle – how and where they enter, develop (move around) and leave the organization.

03
Assess existing (supply) and planned (demand) resource pool

Definition

The Resource Pool is the supply side of the equation; your available Human Capital; the current and future workforce that will deliver on organizational objectives.

Key Activities

Using the current workforce profile, identify trends; time in position, turnover, increased/decreased compensation, growth or contradiction of value of role; validate findings with managers and business leaders.

Create a projected workforce "profile" based on trends and assumptions. Ask questions such as:

  • What changes (technology innovations, organizational structure, outsourcing etc.) are expected over the planning period?
  • How will that affect volume, type and locations of work? Skill mix?
  • What will the planned organization look like (what competencies, how many people, what certifications?).

Prioritize the top 5-8 competencies that are essential; rank these to differentiate one job level from another.

Summarize the projected (demand) staffing levels and competencies that can/will meet the need.

Beware of …

Not validating the "most likely" scenario with internal (experienced business leaders) external sources (peer networks, benchmarks etc.).

Helpful Hints…

Use the same data elements in the current and future workforce profile so gaps can be readily idenfied and validated.

04
Identify future skills demands/needs and gaps/excesses

Definition

A Gap Analysis will identify how well the workforce is positioned for the future; shortfalls require action; excesses require realignment.

Key Activities

Align the current and projected workforce profile and identify:

  • Gaps in headcount, grades, knowledge, skills, abilities, experience
  • Excesses in headcount, grader, knowledge, skills, abilities, experience

Draft a Solution Analysis to address Gaps and Excesses, cover:

  • Vital skills needed for success
  • Skill imbalance create by turnover; retention strategies and associated costs
  • Training vs. recruiting to fill competency gaps
  • Contractors vs. staff
  • Re-assignment of resources with excess skills to other key roles to create development opportunities; create mentoring for staff needing nominal development.

Beware of …

Don't let the analysis become paralysis; stay focused on priority, critical skills.

Helpful Hints…

Use the gap/excess findings to create Career Development programs that can fill projected needs organically.

05
Model the workforce against the hypotheses

Definition

Scenarios developed with the business to build understanding of the supply and demand issues.

Key Activities

Review findings with business leaders to validate projections and secure support; confirm, gaps and excesses and define associated actions; model alternate projection scenarios.

Reach agreement on overall skill needs, rank criticality of skills, determine broad timing and staff requirements, etc.; determine compensation structure.

Beware of …

Don't get too attached to the accuracy of the projections and outcome of the analysis; it may change and you need to be flexible about it.

Helpful Hints…

Collect cost data as you go; they will be useful in the discussions with business leaders, especially "order of magnitude".

05
Understanding the dynamics of the workforceUnderstanding the dynamics of the workforce

One of the techniques recommended for use as part of our 10 step framework is to draw the workforce system. This is a tool to visualize the workforce system and the flows of people through, up and out of an organization. It is useful to aid understanding of the current state and possible downstream issues and can be used to visualize different workforce breakdowns eg. gender, age, diversity.

Understanding the dynamics of the workforce

06
Define workforce requirements

Definition

This is the demand side of the equation and should include the requirements of key (critical) roles.

Key Activities

Refine needs in terms total numbers and competency requirements.

Outline how the skills can be developed; Recruited, developed through training, re-training, relocation, on-the-job etc. and the lead times involved to be fully competent.

Use these elements to define the "workforce system" (the recruiting , training, retention, realignment functions) that reflects what is required to fill the critical roles.

Develop alternate scenarios (best case/worst case) and their consequences e.g. lack of skills/expense of resources in market shifts focus to training.

Develop a communication strategy to communicate workforce plan and expectations to impacted employees and stakeholders.

Inventory HR programs that will require modification as a result of the projected requirements e.g., tuition reimbursement, certification awards, completion of training.

Beware of …

Critical roles should not just be senior roles but those that bring significant value or are "mission critical" to the overall value chain of the business.

Helpful Hints…

Ensure HR Business Partners are connected to the business strategies of their operating units and capable of translating such strategies into a people agenda and set of requirements. Be on the look-out for new skills required in new places (geographies).

07
Develop resourcing strategy with the business

Definition

Sourcing strategy determines where an organization will look for the talent it needs – internally, externally; build versus buy talent approach.

Key Activities

Agree upon guiding principles and philosophical approach to talent acquisition.

Assess labor pool in key geographies for critical skills and competencies needed and :

  • Determine whether internal candidates can meet need and how internal sourcing will be handled
  • Assess need for external recruiting support; establish preferred provide contracts with reputable recruiting firms; leverage the organizational brand to solicit better hires
  • Identify alternative sourcing strategies – campus/trade schools, flexible arrangements, relocation, secondments, etc.

Information sources include published labor market analysis; internal skills and competency databases.

Beware of …

Regulatory/work council complexities.

Cultural nuances and ways of working.

Internal staff distraction and disruption if internal postings not well coordinated.

Internal equity issues.

Helpful Hints…

Look broadly at your own internal talent pool globally – do you even know where the skills reside in your own organization?

Leverage technology as much as possible.

Be prepared to rigorously manage this as a strategic project.

08
Develop Resourcing Plan and engage with business

Definition

A tactical plan to implement the resourcing strategy that integrates the defined workforce requirements.

Key Activities

Establish project lead and project management team(s).

Develop a high level action plan that includes activities and costs required to implement the sourcing strategy.

Review with key stakeholders to gain buy-in, confirm their role and establish critical success factors and ways of working together (collaboration on interviewing, tools in place, hiring process, who has final say on compensation, etc.)

Review plan with legal to determine whether any "red flags" exist; develop mitigating actions

Monitor progress and track costs

Beware of …

Roles of hiring manages are critical; they will need support in matching their needs to specific candidates; scheduling of interviews and time management; follow up with candidates; assessing "fit".

Helpful Hints…

Evaluate need to conduct training for hiring managers on behavioral interviewing techniques, etc.; include any actions that result in plan.

Pay significant attention to on-boarding to ensure that new recruits become engaged and productive quickly – assign mentors and transition coaches, tool and checklists, etc. to ease transition.

09
Implement and measure

Definition

Implementation requires an Action Plan that details steps required to implement the programs and measure outcomes.

Key Activities

Appoint a project team to oversee implementation and monitor progress against goals.

Develop a detailed action plan that includes all the tactical activities required to implement the workforce plan:

  • Project Management Office
  • Communication strategy: employees and leadership
  • Training
  • Recruiting
  • Technology systems
  • Policy and Program Revisions
  • Measures of Success during implementation and on-going

Beware of …

Competing priorities and "fire fighting" that push the implementation to the bottom of the priority list.

Helpful Hints…

Implementation requires time and resources; make sure the hard work on analysis is not when there is no resource for execution.

10
Integrate with other planning processes

Definition

The Strategic Workforce Planning process will inform both talent management, succession and career paths as well as be an input to corporate/ strategic plans.

Key Activities

Strategic Workforce Planning (SWP) can be an integral part of the corporate planning cycle and scenarios from the corporate cycle can be used in scenario modeling at workforce level. In some organizations the SWP tools are part of the wider corporate toolset.

Beware of …

The tools and process getting in the way of challenging and searching conversations that need to be had with BU leaders about likely futures for the business and their consequences.

Helpful Hints…

Keep the whole process simple but searching: focus on the key roles first, not all of them, identify the likely new roles and skill-sets, scenario plan and be predictive and insightful!