Essential guide to choosing workforce planning tools

Part II of a two-part article focused on strategic workforce planning, impact on culture and the evolution of HR technology. In this article, I outline the role of technology in strategic workforce planning and provide a framework for CHROs and CXOs to consider before investing in tools for their organization. Since my first brush with workforce planning in the summer of 1998 when I presented a ‘manpower plan’, as it was referred to then, using Markov’s analysis, the topic has fascinated me. Through the years, I have had the opportunity to experiment with different workforce planning strategies to meet business goals before co-founding a skills-based workforce planning application company. If you haven’t caught up with Part I of this article, I highly recommend it.

It’s easy to feel overwhelmed by business problems. It’s harder to pinpoint the systems responsible for creating them. Here, I bring together decisions impacted by different parts of a workforce planning problem to discuss how we can cope with change. Technology, obviously, plays a huge role. The challenge is that writing about technology and tools is an impossible task. No matter the research, there is always something out there that’s possibly better than existing tools and just right for your needs. So, instead I offer a framework for choosing the right tools.

As a CHRO or CTO in the market for strategic workforce planning (SWP) tools, consider the following questions and scenarios:

• Does the organization iterate processes frequently?

Illustration: While pitching my skills-based workforce planning app, I encountered a high growth tech startup that saw its headcount grow exponentially in 12 months. They were also losing talent and business leaders complained that they did not find the right numbers of skilled people and with the right attitude. This had them worried. To overcome the problem, the talent acquisition (TA) team doubled the number of recruiters and spread their net wider. The TA team’s tactic was to throw more people at the problem rather than investigate what caused the issue and iterate. It turned out that in the zeal to meet targets, someone in the TA team had done away with culture fit assessments without evaluating the impact. Chaos ensued. Multiple sub-cultures and ways of working emerged. Naturally, this impacted client delivery and showed up in higher-than-normal attrition rates and project overruns.

• Does the organization believe in creating and documenting changes to processes?

Illustration: A senior business leader in a well-funded financial services startup operating in a crowded market once explained to me that his strategy to grow the business would be to ‘borrow’ a competitor’s playbook and adapt it. He believed it saved time and built a competitive edge. The outcome, however, was that his team were caught in an endless loop of playing catch up and reacting to the environment. They discounted products and gave away massive margins to agents and brokers. Principally, they did not invest in creating a playbook for themselves. Eventually, they were shut down and the team was asked to leave.

• Does the organization have a system of record or ‘source of truth’ for all HR data?

Illustration: In Part I of this article, I refer to an example on the impact of using multiple systems.

• Does the CEO have a long-term vision (>= 3 years)?

Illustration: Refer this comment by a partner at a private equity firm that illustrates the point.

If the answers to the questions above were in the affirmative, consider the most important question.

What will you use the output of the SWP exercise for?

Some likely scenarios:

• Identify internal talent for job postings. E.g., no. of sales managers with valid AML (anti money laundering) certification and 5 years in a customer facing role.
• Budgeting training expenses. E.g., how many employees need to be re-skilled for a valid PMP certification before they are deployed on client projects.
• Attrition analysis over the past 5 quarters for a business unit.
• Predict future skill requirements, or to predict turnover for a set of high performers. Check out Techwolf.ai that uses organizational network analysis (ONA) to deliver results.
• Perhaps, the requirement is somewhere in the middle, and includes extensive analysis with some predictive capabilities. E.g., does it make business sense to open a new branch in a location and what is the availability of skills and salary cost? LinkedIn Talent Insights is one such tool.

Workforce planning is an iterative process on a continuum and addressing how the output of the exercise will be used allows founders and business leaders to allocate time and resources accordingly. Gartner HR Effectiveness survey conducted in 2019 reveals that only 10% of organizations are using a holistic strategic workforce planning approach to maximize effectiveness of current and future state workforce in line with strategic business priorities, while 23% use it for a long-term forecast. 56% of organizations continue to use workforce planning for the short to medium term. Stating the objectives of the SWP exercise upfront will set clear expectations, manage to budget, and help align resources to business needs. A 2020 Gartner poll of 42 workforce planning leaders’ rates 67% of HR functions as not effective at using data in workforce planning. Technology makes working with large amounts of HR data possible. Josh Bersin’s coverage of the evolution of HR technology market is by far the most comprehensive. The movement from systems of record to systems of engagement and systems of design is an easy way to understand the plethora of tools and their purpose. Refer here.

A framework to choose SWP tools:

There are 4 aspects to consider:

1. Data: Integrating HR data would be the start point. This could be a large platform/system of record and engagement like Workday, SAP SuccessFactors, Oracle HCM etc. or platform of platforms/system of design and engagement like ServiceNow, Microsoft, Workday etc. If your budget does not allow it, MS-Excel also works but know that there are limitations to what can be done. There’s no ONE way of doing it. A large platform with built in analytics could have limitations, equally a lattice of applications could prove costly and complicated to manage.
2. Scenario Modeling: An important part of strategic workforce planning are the scenarios to model different outcomes. ‘What if’ scenarios that consider the economic, ethical, political, regulatory, environmental, and labor context in which the business operates. E.g., during the covid-19 pandemic, startup founders and HR professionals realized that Epidemic Diseases Act 1897 and the Disaster Management Act 2005 are applicable to organizations. Therefore, choose a tool that provides flexibility in modeling scenarios.
3. Visualization and Story Telling: Story telling is a compelling way to make sense of the data. Since people respond more easily to emotion than facts, founders and CHROs must focus on how the story will drive business goals and choose tools that enable them. There is a range of workforce planning tools here — from reporting to business intelligence (BI) to predictive analytics (using AI). It is imperative to know where your organization lies on the workforce planning continuum before choosing tools. Some incredible people analytics tools include Visier, Splash BI, One Model, Keen, Microsoft VIVA, Workday etc.
4. Acting on output: I cannot emphasize this point enough. How the organization acts on the output of the workforce planning exercise determines whether it will be tactical or strategic in nature. Accordingly, drive investments into the right tool.

Conclusion:

Workforce planning has evolved tremendously over the decades and presents the opportunity to be ‘strategic’ in people decisions. Whilst a mere 10% of organizations get it right, there is ginormous potential. But this requires the HR function to re-skill. The future of HR decision making involves a 360-degree view of the environment that the business operates in, being comfortable with data, people analytics and storytelling. Like a confluence of HR, Marketing, corporate planning, business management and IT. It promises to be an exciting time to be in the profession and a future ready way to craft a workforce strategy.