1. Strategic Workforce Planning Aligning Talent and Strategy Presented by: Jill Lackey Allegacy Consulting Group
Carolina Credit Union League HR and Professional Development Conference
October 23, 2014

2. What is Strategic Workforce Planning?
Strategic workforce planning (SWP) is the analytic, forecasting, and planning process that connects and directs talent management activities to ensure an organization has the right people in the right places at the right time and at the right price to execute its business strategy
Strategic workforce planning (SWP) is a critical business initiative and not a human resources activity
Strategic (or long-range) planning = long-range planning for the business
Strategic workforce planning = long-range planning for talent

3. Organizational Development: Strategic Workforce Planning
Change
Management
Strategic Workforce Planning
(SWP)
Design
and
Structure
Performance
High Potential
Employees
(HIPO)
Succession
Planning
Leadership & Career
Cultural Initiatives
Narrow the focus from Talent Development to Strategic Workforce Planning

4. Two Types of Workforce Planning
Operational workforce planning – focuses on skills and capabilities needed within the next 6 to 18 months.
Strategic workforce planning – looks 3 – 5 years in the future and anticipates new skills, roles and situations that might not exist today. Deals with variables that cannot be predicted but can be prepared for.

5. The Business Case for Strategic Workforce Planning
Each year, The Conference Board conducts a survey of CEOs, presidents, and chairmen from more than 1,000 companies around the world. The executives are asked to identify and rank the most pressing challenges they face. For the second year in a row, Human Capital — how best to develop, engage, manage, and retain talent — was named the leading challenge among ten choices.

6. The Business Case for Strategic Workforce Planning
The strategies these CEOs plan to implement to address their concerns include:
Provide employee training and development.
Raise employee engagement.
Improve performance management processes and accountability.
Increase efforts to retain critical talent.
Improve leadership development programs.
Focus on internally developed talent to fill key roles.
Enhance effectiveness of the senior management team.
Improve effectiveness of front-line supervisors and managers.
Improve corporate brand and employee value propositions to attract talent.
Improve succession planning for current and future need

7. The Business Case for Strategic Workforce Planning
A 2014 survey conducted by pwc states “As US companies return to growth mode, anxiety over skills needs intensifies: 70% of US business leaders are concerned about the availability of key skills, a sharp increase over 54% that said so in Demand for highly valued skills is strong; the “war for talent” is as fierce as ever. Thus addressing the skills shortage is about much more than hiring fresh talent. It means taking a fresh look at the talent within. Businesses that have been able to build up intellectual capital by continuously cultivating the next generation can experience a distinct advantage”.

8. The Business Case for Strategic Workforce Planning
Aging workforce and approaching retirement wave
By 2020, 25% of the labor force will be age 55+, up from 12% in 1990.
In 2014, the annual growth rate of the overall labor force will shift
55-and-older = 4.1 % (4 times the rate of growth of the overall labor force)
25-to-54-year = 0.3 percent
16-to-24-year-olds - essentially flat
Projected labor shortages
By 2018, with no change in current labor force participation rate or immigration rates and an expected return to healthy economic growth, we will have more jobs than people to fill them.
Anywhere from 5.0 million to 5.7 million potential jobs vacant
If the full employment gap is not filled, using Congressional Budget Office data, estimate the loss in total output as high as $3 trillion across a 5-year period beginning in 2018

9. The Business Case for Strategic Workforce Planning
Projected Leadership Shortage
In numerous surveys, senior executives are expressing concerns that stiffening competition for exceptional individuals is curtailing plans for progress.
The Corporate Executive Board reports that 60% of organizations feel constrained by the leadership shortage
The Bersin Deloitte Advisory Board cites the need to develop organizational leadership capacity as one of the three biggest business challenges companies face today.
Bloomberg also rated leadership development among the top issues confronting HR professionals
Industry Week Magazine called the lack of potential leaders the most pressing human capital problem of our time

10. Strategic Workforce Planning Model
Business Strategy
Segment Roles
Environmental Scan
Future State Analysis
Current State Analysis
Gap Analysis
Action Planning
Monitor and Reporting
Business Strategy - The business strategy must drive the workforce strategy, and the two must be closely aligned. A strategy of cost leadership, for example, will have different workforce implications from a strategy of customer intimacy.
Segment Roles - It is the people in the roles that are most vital to implementing the strategy of the organization that provide the greatest value. While all roles are important — that is why salaries are paid to people in those roles —some add more strategic value than others. the name implies
Environmental Scan - this is done through a combination of analyzing the LRP to identify key business issues that could impact talent (changes in strategic direction, product, geography, delivery mechanisms, technology uses), report analysis and research
External – 2 types of external environmental analysis. First are things like government , regulatory, population demographics, cost of living, competitors. The second is labor market issues like external supply of talent, employment brand, contingent staffing capabilities, etc.
Internal – strategy, resource allocation, budget, culture,

11. Current State Analysis - Detailed analysis of current capability and capacity. Gather employee data by function:
Employment status Location
Demographics Competencies and skills
Diversity criteria Compensation data
Tenure Retirement eligibility
Performance ratings Potential
Engagement scores Status of successors
Future State Analysis - a framework for having a strategic discussion about future possibilities in order to identify future talent needs. The impact of a strong or weak economy, member and employee demographics and expectations, impact of technology
Gap analysis - compare current state to future state for EACH role
Action Planning – what are you going to do about it
Monitor and Reporting - establish metrics; create quarterly reporting and accountability procedures

12. Align to Business Strategy
Analyze the long-range plan to identify impact to talent
What new core competencies emerge?
What organizational structure will best meet your future needs?
What systems and tools will be needed?
What are the cultural implications?
How will staffing needs change?

13. Align to Business Strategy
Strategic Imperative: Implement business intelligence tools that drive performance to ensure long-term stability
Do you have the right technology people to identify, implement, maximize and continually evolve the use of these tools?
What impact will this have on the need for skills or competencies for users of this new data?– (how to analyze, systemic thinking, flexibility, change readiness)

14. Align to Business Strategy
Strategic Imperative: Become an employer of choice
Criteria for top 100 workplaces is based on trust and culture
How will this impact what you look for in leaders?
How will you shift the mindset of current leadership?
What training is needed?
How does this impact your succession planning criteria for promotable potential?
How will you measure and evaluate this?
Criteria for Fortune’s Best Companies to Work For:
Two thirds of the company’s score is based on the institute’s score on the Trust Index Survey, which is sent to a random sample of the employee’s each year. The survey asks questions about their attitudes towards management’s credibility, job satisfaction and camaraderie. The other third is based on responses to the institutes Culture Audit, which includes detailed questions about pay and benefits programs, and a series of open-ended questions about hiring practices, methods of internal communication, training, recognition programs and diversity efforts. After evaluations are complete if any news comes to light that might damage employees’ faith in management, we exclude it from the list.
Culture Audit
Are employees at company X compensated fairly?
Is salary on par with competitive companies?
Are benefits comparable to those of a company’s competitors?
Does the company have programs in place that demonstrate they value your work? This can range from awards to bonuses, and even be as basic as regular performance appraisals.
Does the company invest in training to ensure employee success?
Does management have an open door policy?
Is there a good stream of employee communications in the company?
Are employees challenged?
Do your values match those of the company?

15. Role Segmentation Impact Talent Segment Investments Over Time
Roles that drive the strategy
Strategic
Critical to driving long-term competitive advantage, with specialized skills or knowledge
Strengthen, retain and ensure succession plans are in place.
10 – 15%
Roles that support the strategy
Core
The “Engine of the Enterprise,” unique to the company and core to delivering on its products and/or services
Protect and Develop
20 – 30%
Requisite
Cannot do without, but whose value could be delivered through alternative staffing strategies (other than full-time headcount)
Streamline, Outsource and Maintain
60 – 70%
Roles impacted by the strategy
Misaligned
Talent whose skill sets no longer align with the company’s strategic direction
Redeploy or retrain
As few as possible

16. Environmental Scan External – Economic and regulatory
External – Labor market supply (external supply of candidates, employment brand, competition, recruiting sources like colleges, trade associations, etc.)
Internal – Organizational factors (long-range strategy, business plans, resource allocation, budgetary constraints, culture).
The environmental scan is completed through a combination of analyzing the LRP to identify key business issues that could impact talent (changes in strategic direction, product, geography, delivery mechanisms, technology uses), internal and external report analysis and research

17. Economic and regulatory
Environmental Scan
External
Economic and regulatory
What regulatory changes are anticipated between now and 2018? Do we have the right skills and competencies to respond?
How will the economic forecast impact our staffing needs in terms of skills, numbers and timing (e.g. improving housing market = > need for mortgage lenders, increase in capital spending = > commercial lending)
What are the impacts to talent from the “disrupters” in technology?

18. Economic Forecast External Environment
Source: WSJ January Consensus Forecast

19. Key Regulatory Agenda Items for Credit Unions
Taxation
Risk-Based Capital
Secondary Capital
Business Lending
Data Breaches/”Target” Incident
Mortgage Regulations (QM)
CFPB
Definition of ERM
External Environment

20. Environmental Scan External
Labor market supply (external supply of candidates, employment brand, Competition, recruiting sources like colleges, trade associations, etc.)
What is projected employment rate within footprint? How does this impact growth plans?
What colleges offer the skills you will need in the future and how can you start building relationships now?
What “employment brand” will attract millennials? How do you need to change to support that brand?

21. Unemployment Trends County Unemployment Rate External Environment
Mecklenburg, NC
6.7%
Forsyth, NC
6.1%
Source: BLS.gov; Data reported for December 2013

22. Environmental Scan Internal
Organizational factors (long-range strategy, business plans, resource allocation, budgetary constraints, culture).
What is projected membership growth ? how many employees will be needed? Where? How many Branches? What percentage of members will use FCs, mobile, CC, web?
What new technical skills are needed to support LRP?
What products or services will be used to drive projected growth each year and do we have the talent to support them? (e.g. lending growth – mortgage? Retail? Equal?)
What delivery channels anticipate the greatest growth, when and how? Do we have the talent to support?
What is the impact to organizational structure, and staffing gaps, and/or surplus?
What training will need to be provided, when and for whom in order to prepare staff?

23. Future State Analysis
Future State Analysis – a framework for having a strategic discussion about future possibilities in order to identify future talent needs.
Strong economy – adequate talent supply vs. inadequate talent supply
Impact – compensation pressures, buy vs grow, college recruitment, alternative sources
Member demographics and expectations
Impact – technology skills, behavioral competencies
Employee demographics and expectations
Impact – attraction, retention, development and engagement
Impact of technology
Impact – Resources, skills, alternative sources, organizational structure – centralized or decentralized?

24. Current State Analysis
Current State Analysis – Detailed analysis of current capability and capacity.
Gather employee data by function:
Employment status
Location
Demographics
Competencies and skills
Diversity criteria
Compensation data
Tenure
Retirement eligibility
Performance ratings
Potential
Engagement scores
Status of successors
Analyze employee reports for gaps, vulnerabilities, opportunities and engagement level. What is the impact?

25. Gap Analysis Compare current state to future state for EACH role
Role segmentation
Headcount needs
Skills and competencies
Experience and education
Behavioral characteristics
Level of engagement

26. Gap Analysis Position: Gap Dimension Current State Future State Gap
Role segmentation
Headcount requirements
Vulnerable positions (retirements, transfers, resignations, performance issues)
Engagement level
Retention risk (qualitative not quantitative)
Bench strength or availability
Technical/business skills
Behavioral characteristics/other competencies
Experience and education

27. Action Planning Organizational structure design Job redesign
Attraction and acquisition plan (recruitment strategies)
Outsourcing options
Redeployment needs or retooling plan
Performance management
Succession planning
Learning and development plans
Total rewards strategy
Retention and engagement strategy

28. Position: Branch Manager
Gap Dimension
Current State
Future State
Gap
Role segmentation
Supporting
Core
Need to be more strategic; increase impact to operating excellence and revenue
Headcount requirements 15 23 8
Vulnerable positions (retirements, transfers, resignations, performance issues)
3 Mgrs & 1 Asst. Mgr – 60 yrs. +; 2 open positions
6 Mgrs & 2 Asst Mgr – 60 yrs.
 Be prepared for departure of up to 8 managers by 2018
Engagement level
(Based on Denison Organizational Culture Survey)
Empowerment = 68%
Vision = 88th
Cap Development = 37th
Empowerment > 75%
Vision > 75th
Cap Development > 50th
 Increase scores by:
Empowerment: 7 %ile
Capability Development: 13%
Retention risk (qualitative not quantitative)
Competitive field for recruitment; average days to fill = 80
Need to define a clear career path for Branch Managers
Create formal Mgr. training Program for Asst Managers; Career Development coaching
Bench strength or availability
0 AM ready for promotion wi next 12 mths
2 or > AM ready for promotion within next 6 months
Hire Asst Mgrs with skills and potential for advancement
Technical/business skills
Two plus years consumer lending exp.
Data Analytics
Technologically savvy
Change recruiting criteria
Create technical training
Behavioral characteristics/other competencies
Sales focus, strong
interpersonal, leadership, oral and written communication skills
Inspirational leader
Systems thinking
Intellectual curiosity
Risk-taker
Create training modules on these topics;
Provide mentors
Identify developmental assignments
Experience and education
Three or more years related experience in financial institution branch
Bachelor’s degree and/or equivalent experience in financial institution; customer service mgmt. experience
Promote education reimbursement program

29. Monitor and Report Establish metrics
Create quarterly reporting and accountability procedures
Schedule quarterly SWP review meetings

30. Keys to Making Strategic Workforce Planning… Strategic
Driven by business strategy and objectives
Executive team’s commitment to making SWP a priority so it is proactive vs. reactive
Accurate and objective segmenting of the workforce
Consistent and sustained process and approach
Readily accessible analytics
Executive team’s capability to lead change

31. Supporting Infrastructure
Superior communication strategy
Enterprise-wide project management
Technology
Teamwork and collaboration