Article by David Stroud
on 22 Apr 2015
The business arena we interact with today is characterised by uncertainties, rapidly changing customer expectations and increasingly disruptive competitors. Organisations are pushed to prioritise their human assets - making sure that they have the right mix of skills, knowledge and experience in their workforce to support business aspirations.
Over the recent years, the ‘workforce big data hype’ dominated the HR tech space and buzzwords like ‘workforce analytics’ and ’HR big data’ took unprecedented hits on Google. The HR function has also jumped on the analytics bandwagon with organisations turning to workforce planning and analytics to guide workforce decisions, albeit with varying degrees of success.
HRBoss, an Asia-based Cloud provider of award-winning workforce technology solutions recently conducted an all-Asia survey to study organizational approaches to workforce planning and to determine what differentiates success from failure. In fact, what they actually found might cause you to think twice about your current workforce planning approaches.
Based on the responses of 700+ organisations, 98% believe that workforce planning is important to their organizational success and yet, only 2% were happy with their current workforce planning process.
As with any research, the insight lies in the details…so if you ask me what can you take away from this survey? Here are my top 3 takeaways from the 2015 Workforce Planning Trends and Practices Survey Report.
1. Workforce planning firmly on the agenda - but poor processes and low budgets are the main culprits
Using workforce planning to analyse, align and optimize their human capital assets have been top of mind initiatives for HR leaders for many years, but time has shown that it has consistently been one of the most difficult programs to launch. Just like in the United States and Australia, organisations in Asia overwhelmingly believe that it is a key ingredient in how they will be successful, but only 12% have proper workforce analytics and planning software in place.
However, as aptly pointed out in the report, organisations need to be careful of confirmation bias so that investments and effort goes into the right areas. According to studies in Psychology and Cognitive Science, confirmation bias is the tendency to search for or interpret information in a way that confirms one's preconceptions, leading to statistical errors. 65% of people said they would be able to predict talent gaps in 6 months’ time yet more than half the respondents also said they cannot access employee data easily -a shocking fact that would make any data focused C-suite executive very uneasy!
But here’s the upside: 63% are planning to invest more in 2015.
2. The burning reason for Asian respondents: use workforce planning to improve talent acquisition and development
HR leaders & managers in Asia are very focused on using workforce planning to make better strategic decisions, especially in the areas of talent management and acquisition. China and Japan are very much still in growth mode, while Singapore is focused on both retaining and acquiring talent. Re-structuring and costs, while important, were quite low on the list for Asian firms in their workforce planning approach.
Based on the survey, HR leaders keen on investing greater resources into workforce planning should be cautious to not over-estimate potential strategic impact at the start and carefully develop their new programs.The majority, over 88% of organisations in the survey, were quite low on the talent analytics maturity scale with a high business risk profile due to working with manually operated, spreadsheet dependent systems. The lack of accurate, up-to-minute data can lead to boardroom frustrations at not having the right data to help support potential growth plans. Organisations further up the workforce analytics maturity scale find that they are able to move their leaders from being captive to immediate staffing pressures into longer term planning – which is good for HR and the entire business.
3. Data management – both the curse and salvation of workforce planning excellence
Like many other business functions, there has been a revolution in the availability of data to HR to inform decision-making over the last 10 years. Equally well known are the range of issues that HR practitioners have in collating, configuring and generally rendering this data meaningful. It was no surprise that respondents cited concerns of data accuracy, complexity and management as being common barriers to successful workforce planning.
What was surprising was that respondents still had confidence that they could predict talent gaps in 6 months’ time, with only 11.9% of respondents using dedicated workforce planning software. Again HR leaders should be aware of the effects of confirmation bias, especially the risks of working with their leadership group utilizing inaccurate data to predict six month talent gaps that the business may use to shape growth strategies.
The secret for increasing the value from HR data is not so much in being more sophisticated, but rather better application to the business through existing processes such as workforce planning. The rewards are there – according to the Corporate Leadership Council 2013 report ‘The Analytics Era’, leading Analytic Organisations has 12% better talent outcomes than the average organisation.
Strategic workforce planning is the long term blueprint to shape all aspects of the workforce in complete alignment with the business strategy. United States HR and workforce planning industry leaders such as GE, Boeing, Starbucks, Deloitte and Pacific Gas and Electric Company stand out as exemplars of what’s possible with an advanced approach to workforce strategy, creating an agile and highly engaged employee base that are passionate advocates for their brand.
However on a global scale, it would be fair to say that most organizations are still focused on operational workforce planning approaches that are pre-occupied with headcount and budget. In Australia, the issues have been similar (data, process and HR capability) but it has been industry, sector and government organizations that have led the way in advocating and applying workforce planning.
One major insight from Australia on workforce planning has been the impact of poor workforce planning resulting in costly skill shortages. An effect of the Australian resources boom - skill shortages led to increased wages, high turnover, and difficulties attracting international staff at the right time, and issues related to industry sectors such as agriculture and residential housing. The key learning from the Australian experience was that early investment in developing mature HR capability and processes backed by a fit for purpose workforce planning platform would have saved significant expense later down the track for firms, resulting in faster time to market, higher productivity and lower talent acquisition costs.
Driven by high economic growth, but complicated by multiple geographies, languages and cultures, Asian HR leaders and managers are facing a range of issues that complicate the establishment of best-practice workforce planning. The good news is that workforce leaders recognize the importance of workforce planning being instrumental to achieving business success, but that the reality of achieving this will go beyond ad-hoc manual processes and high risk / low impact data protocols.
Making a comparison to Australia and the rest of the world, Asian workforce planning faces many of the struggles other firms do but would do well if they seize the opportunity to invest now while growth is coming fast rather than going through the consequences later. Organisations based in Asia also needs to be mindful of competition posed by larger US multinationals that have more advanced talent strategies and who are now on firmly on a globalized growth pathway that extends into Asia.
The ‘Rethinking Workforce Planning in Asia’ 2015 Survey Report has added considerably to the workforce planning body of knowledge and shed light on how organisations are approaching this critical business practice in Asia. What is next for Asian companies in 2015 – we see a continued focus on getting strategic benefit from the early investment in workforce planning capability with extra effort required in data management, forecasting accuracy and linking to better strategic recruitment.
What were your thoughts on the Rethinking Workforce Planning in Asia Survey by HRBoss? What have been your challenges in establishing workforce planning for your business? What have been some of your successes and helpful tips for the wider HR community?
To download the full report go to https://hrboss.com/whitepapers/rethinking-workforce-planning-asia-2015
About the author:
David Stroud, is a leading strategic planner and business model thinker based in Perth, Australia. David is Founder and Director of Workforce Insight, a specialist strategic planning, workforce and analytics consultancy. Workforce Insight combine strategic insights, HR technology nous and deep domain experience to empower business leaders with timely, relevant and trustworthy data to enhance and execute on business strategy. Workforce Insight’s mission is to help clients across Australia realise the true value of their human capital investment and by doing so create more aligned, productive and successful workforces.
To learn more about Workforce Insight, go to http://www.workforceinsight.com.au/