December 16 , 2017

Workforce Planning to Enable Explosive Out-of-the-Box Growth

Breaking the “War For Talent” / War On Talent Cycle

Most people in recruiting and talent management are just so busy that they don’t have time to step back and build programs or marshal line managers to participate in programs that successfully let them see the “big picture.”

As a result, many organizations are just starting to emerge from another painful cycle of rapid hiring followed by large-scale layoffs.

I call this phenomena the “war for talent” followed by the “war on talent.” Unfortunately, many organizations can look back at their history and see that for decades they have been repeating the same cycle over and over.

This “war for talent/war on talent” is unnecessary and expensive. In my view, it’s time to forever break that cycle through more effective workforce planning.

The topic of workforce planning is hot these days (it will be a major topic at the fall ERE Expo) because more and more executives have started openly discussing their desire not to repeat the painful “war for talent/war on talent” cycle. This binge and purge is extremely expensive, and it damages the firm’s employer brand image, stock performance, and innovation capability.

If you’re going to end this vicious cycle, focus both time and resources on workforce planning and in particular, upturn planning. While news reports may have left you thinking things are not getting much better, many organizations report that they are anticipating 200%-plus growth in requisition volume compared to last year by Q3 end.

If you work in talent management and you were surprised by the last economic downturn, don’t reaffirm your lack of competence by being surprised by the next upturn. Even the most pessimistic economists predict an upturn; the only question is when. Regardless of when it occurs, the upturn will provide talent management leaders an opportunity to make the talent management function look good.

By developing a turnaround plan and having your processes in order so that when the upturn does occur, your firm will be poised to act quickly and take advantage of the talent opportunities available.

 

Workforce Planning Defined

“Workforce planning is an integrated and forward-looking process and set of action plans that are designed to predict what will likely happen with regards to talent supply/demand in the organization and what prescribed actions will be required by managers to avoid or mitigate people problems, take advantage of talent opportunities, and to improve the ‘talent pipeline,’ so that the firm will have the necessary ‘people capabilities’ to meet your business goals and to build a competitive advantage over other firms.”

 

The workforce planning process for specifically addressing the economic turnaround is often referred to as a “explode out of the box” turnaround plan.

10 Talent and Workforce Planning Opportunities

No manager wants to be blindsided by the future, so the foundation element of any decent workforce planning effort is forecasting. However, take a broad view of forecasting, looking beyond the availability and demand for labor to identify highly probable upcoming talent problems and opportunities as well. Accurately forecasting upcoming problems and opportunities gives managers ample time to prepare solutions for problems and to build the business case for taking advantage of talent opportunities.

Most professionals involved in workforce planning successfully identify upcoming problems, but few take the time to identify and prepare for upcoming opportunities. Great businesspeople are always seeking out new opportunities, so realize that when the economy turns around and corporate revenues increase making investment dollars available, some outstanding opportunities will present themselves.

The top 10 talent opportunities that will occur just as the turnaround begins are:

  1. A broad talent pool. Hiring during times of layoffs can be problematic because some firms use small scale layoffs to release their “deadwood” (problem employees.) However, after sustained periods of economic decline, many organizations will have ceased operations entirely, forcing even the most qualified and strong performers into the labor market. The end result is the talent pool that will be available in the first few months of the turnaround will be very deep. The key is to plan ahead and have a process is ready, so that you can act quickly.
  2. Expanded active candidate opportunities. If you’re in the recruiting function and have no responsibilities for retention at your own firm, understand that as a turnaround begins, the number of currently employed people actively looking for a job will increase dramatically. For example, one recent study by Adecco revealed that an amazing 71% of currently employed workers under 30 and 54% of all workers will actively seek to find a new employer when the upturn begins. This means that in addition to the robust unemployed talent pool there also be a huge number of employed people who will be seeking to leave firms that have treated them poorly during the recession. Employees are not stupid; the never-ending round of furloughs, travel freezes, budget freezes, and layoffs have left a lasting impression about how their current firm values employees. This means that if you have predefined and targeted these individuals, you will have an opportunity to hire some truly amazing talent away from your competitors.
  3. Employee/contingent/technology arbitrage opportunities.Arbitrage is a common term in business for taking advantage of value differentials, but it’s a term that’s not frequently used in talent management. Many in talent management and HR are painfully consistent, staunch defenders of an “employee-first” or “people-first” approach to providing labor. Maybe it’s because the word “human” occurs in the title of the function (human resources), but the time has come to stop proposing a single solution (i.e., employees) to fill all labor or work needs. Proposing an “employee-only” approach is an outdated 20th-century concept that needs to be buried. For example, if a manager needs a certain amount of work done (for example, programming) the typical HR answer is “hire a new employee as a programmer.” But there are many other options for getting the programming work done. Some of those include hiring a contingent worker just for the time when the programming is needed. Another option would be to outsource the programming work. A third, but increasingly important, option that needs to be part of the decision-making mix is the choice of having the work done by technology. Rather than using people in every case, HR needs to learn how to add to its range of options the direct substitution of software and hardware for people. Car manufacturers like Toyota have long ago added “buy a robot” as an alternative to hiring new employees. Major accounting firms have also learned to buy software as a viable alternative to hiring more CPAs. This turnaround is an opportune time for HR and talent management to expand their thinking and their processes to include contingent workers, outsourced partners, and automation as additional labor options. I call this approach employee /contingent/technology arbitrage and before the turnaround gets under way, talent management must systematically review every job family in order to identify where technology or contingent labor is a better choice than hiring a new employee. Of course, such an approach requires HR to work closely with procurement, IT, and production to ensure that everyone is aware of the advantages and disadvantages of each of the individual contingent worker/outsource/hardware/software options.
  4. Global “testing” opportunities. Economic history shows us that economic upturns don’t occur uniformly around the world. Obviously talent management managers can take advantage of these variations to recruit heavily in economic regions that remained depressed. These variations also provide you with some great opportunities to test new talent approaches in the countries whose economies turnaround first. You can use these countries as beta test sites to improve your recently initiated but often to this point unmeasured new ventures into social network recruiting, live video interviews, workforce planning, and retention efforts.
  5. Employer brand-building opportunities. If your firm is one of the many that have had your “talent failures” (including layoffs, pay cuts, promotional freezes, etc.) publicized online and in the media, now is your opportunity to begin rebuilding your external image. Act fast to begin to spread the word in the media and on the Internet about the positive things that your firm is doing after you lift your heart and freeze. The fact is that after years of bad stories, the media is hungry for positive people-management practices talk about.
  6. Opportunities to rekindle innovation. Reduced corporate revenues have meant massive budget cuts and overworked staff. However, the demand for innovative products hasn’t decreased at all, so additional hiring and budget will provide an opportunity for your company’s innovative employees to shift from “risk avoidance mode” back into innovation mode. Talent management can facilitate this increased emphasis on innovation by refocusing its development, metrics, and rewards programs to emphasize innovation over cost-containment. Change your employees’ mindset and increase their willingness to take risks, and talent management can play a major role in that adjustment.
  7. Hiring manager “re-education.” During hiring freezes, it’s obvious that managers do very little, if any, hiring. As a result, they forget a lot about the right and wrong way to approach recruiting. Managers need to be updated or even retrained when hiring freezes are lifted. Look upon this “lull” as an opportunity to provide data and business arguments to convince them to increase their focus on recruiting. Educate them about the changing expectations of the workforce and the new technologies available in recruiting.
  8. Talent “alert” opportunities. Almost all of recruiting is geared to respond to an open requisition. This reactive approach is extremely limiting in that it only informs managers of the availability of talent when a requisition is open. This ignores the fact that some managers would purposely begin hiring solely on the basis that highly desirable but seldom available top talent is available. For example, if you managed a golf team and currently had no slots open but learned that Tiger Woods was looking to change teams, wouldn’t you want to be notified? This proactive process is called a “talent opportunity alert” and it should be part of everyone’s turnaround plan.
  9. The opportunity to avoid over-optimism. Many workforce forecasts and predictions are inaccurate because they almost invariably predict steady uninterrupted growth once the economic turnaround begins. Although everyone might be tired of the downturn, it would be a mistake to assume that there won’t be “ticks” or short spurts of growth followed by contraction. HR’s tendency to be overly rosy or optimistic needs to be tempered with the reality that both up and downturns will likely become more frequent in the future.
  10. The opportunity to correctly identify when the turnaround begins. Rather than relying on strategic plans, budgets, or sales forecasts to let you know the precise time when the turnaround has begun, you should consider developing your own process. The easiest and most effective way of predicting within a month of when the turnaround will begin is to use the precursor or leading-indicator approach. This process identifies past economic turnaround patterns in your industry and firm and then uses these leading indicators or precursors as predictors of when your firm can expect growth, and to some degree how much growth. The premise is simple — study past turnarounds in order to identify which internal business functions or competitor firms most accurately predict the time of an economic turnaround. If you find a pattern where for example, your finance department always gets it right or firm X always begins its turnaround at the right time, you can then use their present actions as indicators of the coming turnaround.

Final Thoughts

Some of the most successful people in business got to where they are because they developed processes that allowed them to routinely “turn lemons into lemonade.” Unfortunately, many in talent management get so distracted or even suffer “corporate depression” during economic downturns that they fail to see the sun coming up over the horizon.

Downturns are never pleasant, but exploding out of the box after them can be exhilarating and exciting. Great turnaround strategies don’t just occur on their own, they require that serious talent and resources be put into workforce planning.

If you need more help, see me in Florida at ERE where everyone will be focusing on the future.

About Dr John Sullivan

Dr John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high business impact; strategic Talent Management solutions to large corporations.