1. Workforce Planning in Times of Uncertainty
September 28, 2011
Workforce Planning in Times of Uncertainty

2. David Ulrich on where HR can add value
“In recession, HR should coach leaders to make prudent business decisions.  Some of this means redesigning HR practices like compensation to save money in the short term.  HR should also play a major role in communication and restructuring the organisation to be efficient in all operations.  At the same time, HR can be the voice of the employee to ensure that tough decisions are made fairly.  Finally, HR need to conceive of the future after the recession so that their organisation is better positioned to go forward.”
Source: Purple Line Consulting citing from an interview published by Municipal Journal. March 13, 2009
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3. Challenges Resulting From Economic Conditions
Companies and HR Professionals have faced challenges as a result of the economic crisis and unprecedented economic volatility:
During the economic crisis
cutting and managing costs;
eliminating or reducing compensation and total rewards increases;
managing morale issues
re-evaluating business and human resource strategies
As we emerge from the recession to face economic uncertainty
developing new leadership competencies for senior leaders
responding to demands by staff for security, stability and opportunity
addressing a lack of career advancement opportunities for top talent and employees with critical skills
Source: Towers Watson “Creating a Sustainable Rewards and Talent Management Model” Results of the Global Talent Management and Rewards Survey
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4. Ongoing Issues Organizations are facing these critical HR issues:
Financial Stability
Uncertainty, reducing expenses including salary expenses, and maintaining or increasing staff productivity in profit-driving areas
Talent Management and Staffing
Predicting short and long term staffing requirements, layoff decisions
Business Stability and Efficiency
Employee Engagement and Employee Morale
Keeping employees motivated, engaged and positive during a time of uncertainty, staff reductions and business slow-down
Source: Society for Human Resource Management poll of 50 executive-level HR leaders in February, 2009.
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5. Emerging post-recession issues
As the economy begins its recovery, HR’s goal must be:
To prepare and position its organization and its workforce for the growth and opportunities that lie ahead in a new economy.
Current top staffing challenges:
Ability to provide competitive compensation*
Maintaining productivity levels*
Being able to retain top talent*/**
Reducing employee headcount**
Training and development**
Sources: *CareerBuilder Survey of 2,720 HR professionals in November 2009.
** Deloitte Special Report on Talent Retention. “Managing talent in a turbulent economy: Leaning into the recovery” November 2009.
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6. Conflicting Labour Force Trends
These trends have been predicting labour shortages for years
Demographics
baby boomers are approaching retirement
population growth rate to slow from 1.5% to 1.2% from
labour force growth rate to fall from 1.8% this decade to 0.7% , and 0.5% from
Education
education and skill misalignment will result in a surplus of unskilled workers who cannot fill the jobs companies need
Immigration
a large pool of potential workforce – will it be the right skill level? Is there alignment with the jobs our economy needs?
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7. Occupations Expected to Show Shortages (Canadian Data)
Group
Occupation
Business, finance and administration
Senior management
Human resource managers
HR & business service professionals
Natural and applied sciences
Civil, mechanical, computer and software engineers
Health occupations
Managers in health, education, social & community services;
Physicians, dentists and veterinaries; Optometrists, chiropractors, and other health diagnosing and treating professionals; Therapy and assessment professionals; Head nurses and supervisors; Nurse aides and orderlies; Other technical occupations, aides and assistants in health care; Medical radiation technologists
Social science, education, government service & religion
Managers in public administration
Trades, transport and equipment operators and related occupations
Residential home builders and renovators;
Facility operation and maintenance managers
Contractors and supervisors, trades and related workers
Primary industry
Supervisors, oil & gas drilling and service; Oil and gas well drillers, servicers, testers, and related workers
Processing, manufacturing and utilities
Supervisors, processing occupations such as in petroleum, gas & chemical processing and utilities, and plastic & rubber products manufacturing
Source: HRSDC, Strategic Policy Research Directorate, Looking-Ahead: A 10-Year Outlook for the Canadian Labour
Market ( ), October 2006.

8. Estimated Labour Shortage in Ontario
Ontario is projected to face a shortage of 190,000 workers in 2020, 364,000 in 2025, and 564,000 by 2030.
Source: The Conference Board of Canada. Ontario’s Looming Labour Shortage Challenges. September 25, 2007.

9. Labour Market Imbalances 2006-2015
Occupation
Expected Demand
Expected Supply
Required % Supply Increase (Decrease)
All Occupations
6,550,100
6,441,800
1.6%
Managers in Financial / Business Services
39,700
24,500
58%
Managers in Retail Trade
139,100
56,500
140%
HR & Business Service Professionals
88,200
54,200
Civil/Mechanical/Electrical / Chemical Engineers
64,200
92,100
(29%)
Physicians / Dentists / Veterinarians
54,900
35,500
51%
Nurse Supervisors & Registered Nurses
189,700
107,900
70%
Contractors & Supervisors, Trades & Related
104,600
16,300
509%
Machine Operators: Chemical / Plastic / Rubber
27,300
23,600
15%
Source: Human Resources & Skills Development Canada. “Assessment of Future Labour Market Imbalances by Occupation” in Looking Ahead: A 10-Year Outlook for the Canadian Labour Market ( ). October Online.

10. Skill Misalignment Exasperates Labour Shortage
Do you want to talk to this or should I add text notes?
Source: Elizabeth Church “Skilled labour will be in short supply, predicts former college president” Globe and Mail. Published February 2, 2010.
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11. Conflicting Labour Force Trends
However, this labour shortage has not yet been seen.
As a result of the economic crisis
a reduction in the number of jobs as companies downsize
employees are delaying retirement because of lost value in their investments and economic uncertainty
As a result of economic uncertainty
business forecasting is difficult
companies are hesitant to make labour market decisions
Surveys show there is less loyalty between employees and organizations
top talent and those with critical skills can still find jobs and more employees are proactively managing their own careers
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12. Responding in Uncertain Times
How these trends will collide and what the future labour market will look like is uncertain. HR professionals must manage and be prepared for all conditions.
It is a crucial time for organizations to review and revise their compensation programs in order to retain key talent
Solutions for companies in today’s economy depends on the specific financial condition of your business and industry
Strong and trusted leadership helps assure employees that their best interests are being balanced with financial challenges confronting the business
Management of any company in these times becomes a challenging balancing act - between market-driven management and people management
Workforce planning and talent management are the critical components in assuring long-term sustainable growth when the economy rebounds – and competitive strength when the economy lags.
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13. Workforce Planning Addressing Challenges While Facing Uncertainty
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14. The Cost of Not Managing Talent
Recruiting Costs: direct HR, search firms, and interviewing.
Assimilation and training programs.
Unemployment, severance and other statutory costs.
Employee learning curve, productivity drag.
Departmental productivity loss, loss of morale.
Loss of knowledge, intellectual property, customer relationships.
Loss of revenue, delayed revenue realization.
Embedded costs due to increased HR operating costs.
Embedded costs due to increased management costs.
Research has shown that the cost of replacing an employee ranges between 6 to 12 months’ salary, depending on level, skill and difficulty in replacing.
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15. HR Best Practices
Implement succession planning and career management programs that enable workers to gain skills and experience in areas critical to organization’s future strategic needs
Promote career management and development programs when recruiting
Improve retention and strengthen workforce capability, provide employees with career development and management opportunities
Can market their transferable skills internally while pursuing new roles
Develop programs and best practices for assimilating industry-switching employees
Assess new recruits’ ability to fit within your organizational culture
Manage an integrated approach to the employee value proposition
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16. Talent Management & Workforce Planning
Flexible & Productive Organization
Succession & Talent
Issues/ Gaps
Talent Resource Planning
Pipeline of
Talent
Talent Definition
Business
Goals
Talent
Retention & Productivity
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17. What is Workforce Planning?
“Any effort designed to ensure the continued effective performance of an organization, division, department or work group by making provision for the development, replacement and strategic application of key people over time.”
“A deliberate and systematic effort by an organization to ensure leadership continuity in key positions, retain and develop intellectual and knowledge capital for the future, and encourage individual enhancement.”
William J. Rothwell
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18. Reasons for Talent Management
Provides increased opportunities for “high potential” workers
Identifies “Replacement Needs”
Increases talent pool of promotable employees
Contributes to implementing the organization’s strategic plan
Assists in the realization of career plans
Allows the organization to tap its intellectual capital
Accelerates development of diverse groups
Increases ability to respond to changing environmental demands
Improves employee morale
Increases capacity to cope with effects of voluntary separation programs & possible restructuring
Highlights employee value to the organization
Increases capability of the organization to cope with the effects of downsizing
Identifies essential workers and work practices
Source: survey results of members for the Society for Human Resources Management (SHRM)
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19. Model for Systematic Talent Management
Step 1
Make the commitment to systematic Talent Management planning and establish a Talent Management Program
Step 2
Assess present work requirements
Step 7
Evaluate the Talent Management program
Organizational Success
Organizational Success
Step 3
Appraise individual job performance
Step 6
Close the developmental gap so as to meet the Talent Management needs
Step 4
Assess future work requirements
Step 5
Assess individual potential
W. Rothwell, 2001
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20. Identification Through Segmentation
Priority Candidates RN
Leadership/
Critical Skills BB
Key Candidates
Critical
Position
Non-Performers
Value to Organization
Solid Performers A0 JT
Continuing Role SB
Candidates for Exit Package BT
Discontinuing Role/Project
Candidates for Exit Package
Candidates for Moving Internally
Does Not Meet Expectations
Meets Expectations
Exceeds Expectations
Current Performance
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21. Who Should We Be Concerned About?
Once the top and priority candidates are identified, consider the risk that they would elect to leave the organization:
High
High
Value to Organization
Low
High
Risk of Leaving
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22. Assessment Grid: Retention Risk PrioritizationBB JT
Leadership/ Critical Skills RN
Critical
Position
Value to Organization A0
Continuing
Role SB BT
Discontinuing Role/Project
Low Risk
Medium Risk
High Risk
Risk of Leaving
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23. Where is the Focus? Critical positions: Critical people:
Those which add significant value to the corporation; and
Which if they become vacant due to imminent retirement or to another organization recruiting the incumbent, would expose the organization to risk because of the difficulty in sourcing a good candidate
Critical people:
Individuals who show the potential to move up through the organization to fill senior positions;
Represent the talent pool to staff the senior positions and should be retained and developed in order to potentially reduce the risk the organization faces from senior and other critical positions.
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24. More to the Issue Than Meets the Eye
Identifying Root Causes
Turnover cause indicators by segment
General understanding ...
Left for higher pay
Better opportunity
Job dissatisfaction
Lack of career progress
Ready for a change
Personal reasons
To deeper, specific causes ...
Disrespect from manager
Burnout from pace of work
A way to get more time off
Manager not dealing with low performers
Inflexibility of work hours
Other organization seems to want me more
Months Tenure at exit
>3
Poor performance management/ coaching
Poor success profiling
Inadequate training/ development
Layoffs
Limited career paths/ development
Misaligned rewards
Lack of autonomy/challenge
Uncompetitive pay
Poor organization reputation, mission
<3
Poor success profiling/ screening
Inadequate initial training
Uncompetitive pay (“job bridging”)
Overselling job at recruitment
Job content intolerable
Poor coaching and management
Involuntary
Voluntary
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25. The 5 Big Levers to Pay Attention To
Organization structure and business processes set up to support excellence
Resourcing practices deliver talent where and when it is needed
Healthy staff relationships sustain a productive focus and environment
A compelling “Employment Deal” makes people feel rewarded/wanting to stay
Performance and development programs drive high standards
Role design and work processes
Reporting relationships
Decision and operating processes
Competency models
Selection and promotion systems
Succession planning/leadership resourcing
Communications to integrate effort
Staff engagement and involvement
Compelling work environments
Good management
Pay and benefits
Recognition programs/practices
Work and career opportunities
Measures and feedback (PMP systems)
Development support/learning systems
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26. Is Yours A Great Company?
A company’s face to the world, its reputation,
what it stands for, is it’s
employee value proposition
Why would a talented person choose to work here?
What are the two to three most competitive things your organization does to be an attractive place to work?
How are your company’s values and culture reflected in your employee value proposition?
Great brands sell goods, great companies attract talent
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27. The Employee Value Proposition Audit
Do employees think your organization is a great place to be? Do they want to stay? Do others want to join?
Do you have a clear, distinctive and compelling promise for your employees’?
Do you have enough leaders to grow your business? Of the leaders you have, are they the right ones?
Do you know your key positions and key individuals? Do you have plans for their development?
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28. What is an “Employee Value Proposition”?
Clear understanding of the real investment made in all aspects of the “REWARD” system
Environment
Citizenship
Reputation
Recognition
Connectedness
Resourcing
Role Design
Contribution
Feedback
Development/ Advancement
Work
Base Salary
Short & Long Term Variable Pay
Equity/Ownership
Health & Welfare
Retirement
Pay and Benefits
Work/Personal Balance
Communication
“Supervision”
Culture
Employee Value Proposition
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29. What is an “Employee Value Proposition”?
Clear objectives and goals related to what the investment is meant to achieve from all stakeholder perspectives.
BUSINESS
CUSTOMER
EMPLOYEE
Financial performance
Operational performance
Service/product performance
Value for cost
Financial rewards
Non-financial rewards
Human resource productivity
ROS/RONA/Margins
Cycle time
Customer retention and growth
Service/product performance vs. industry standard
Contribution to customer “value”
Employee satisfaction
Growth
Turnover
Equity
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30. What is an “Employee Value Proposition”?
Definition of what is delivered in each major rewards component and how will it be delivered to meet specific objectives.
What programs are necessary to support the
CRITICAL SUCCESS FACTORS of the business strategy?
BUSINESS STRATEGY
CRITICAL SUCCESS FACTORS
HUMAN RESOURCE IMPLICATIONS
Programs & Measurement
HUMAN RESOURCE STRATEGY
(What components leverage the best outcome)
TOTAL REWARD STRATEGY
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31. Employee Value Proposition
Is unique versus competitors
Creates magnetism for talented staff or desirable recruits
Is really distinctive
Is reliably delivered
Is recognizable to employees and potential recruits
Is perceived as offering a fair exchange
A distinctive
value proposition..
A distinctive value proposition provides competitive advantage
in the marketplace
as long as it..
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32. Distinctive Value Proposition
An employee value proposition delineates why an employee would be compelled to work for an organization. A great employee value proposition combines personal fulfillment with a chance to be part of a great company with rewards aligned to the value proposition.
What are the compelling reasons for top talent to join and stay with your company? Does it differ by employee groups?
How well does your employee value proposition fit with your market value proposition? How does it compare with your competition?
How does your company “manage” your employee value proposition?
Companies with superior employee value propositions
capture more and better talent share
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33. Talent Management Considerations
Think about the current and future state of your organization relative to the following:
Organization’s strategic plan
Organization’s structure
The quality of your “employee value proposition”
The quality of your talent pool
Workflow
Work methods
Will new key positions emerge?
Will old key positions fade?
“Best guess” for how your organization will function over the next 5 years
And what does that mean for the requirements of your human capital?
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34. Questions
Has your organization re-evaluated its priorities to face the new economic reality? In what ways?
What future opportunities for your organization do you anticipate? Is your organization prepared to capitalize on them?
How will your organization prepare and position itself and its workforce for the opportunities that will arise from economic recovery? How will your organization simultaneously prepare for a possible second recession?
What role does the HR function and HR leadership play?
The most successful companies never stop funding their most critical competencies – product innovation, customer service, or anything else
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