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Design and Build a Strategic Workforce Planning Toolkit

Create a workforce planning toolkit that will ensure the right talent is available when and where it is needed.

  • Organizations struggle to implement a strategic workforce plan. While headcount planning is a process most organizations are comfortable with, workforce planning is a more complex undertaking that involves more stakeholders, more quantitative and qualitative data, and longer planning horizons.
  • A lack of suitable data and internal expertise on designing and applying workforce planning means that many organizations apply it infrequently, improperly, or not at all.

Our Advice

Critical Insight

  • It is common practice to continually reassess customers, markets, and products in today’s VUCA environment, but there is often no parallel assessment of workforce composition. Leaders need to be planful and develop a workforce planning strategy that positions their organization to take advantage of change rather than fall victim to it.

Impact and Result

  • Start the workforce planning journey by designing the process and planning for the different stakeholders and analyses that will be involved.
  • Implement a clear and straightforward workforce planning process aligned with organizational capabilities and maturity to make workforce planning achievable and attain the benefits of this strategic planning process.

Design and Build a Strategic Workforce Planning Toolkit Research & Tools

2. Build the analysis toolkit

Create a toolkit that enables leaders to effectively identify the needs of their workforce.

3. Design the forecast framework

Determine the approach to critical roles, create a framework for supply and demand projections, and determine whether workforce plans will apply across the entire organization or for each function.

4. Establish integration points

Decide how results will connect to related programs and processes and create a project plan.


Workforce Planning

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How to complete this course:

Use these videos, along with the Project Blueprint deck above, to gain an understanding of the subject. Start with the Introduction, then move through each of the Course Modules. At the end of each Module, you will be required to complete a short test to demonstrate your understanding. You will complete this course when you have completed all of the course tests.

  • Number of Course Modules: 5
  • Estimated Completion Time: 1.5 hrs

Learning Outcome

Create a workforce planning process that is aligned with organizational needs and capabilities.

Learning Objectives

By the end of this course, learners will be able to:

  • Determine their approach to workforce planning by setting goals, project scope, and inventorying their resources and relevant data.
  • Establish a plan for collaborating with functional leaders to effectively identify requirements for the workforce, such as skills, competencies, roles, locations, demographics, functions, and structure.
  • Design a forecast framework to understand their workforce supply, demand, and gaps.
  • Understand strategies to address workforce needs and prepare to implement the workforce planning process.

Course Modules

Now playing

Design and Build a Strategic Workforce Planning Toolkit - Introduction: Create a workforce planning toolkit that will ensure the right talent is available when and where it is needed

Now playing

Design and Build a Strategic Workforce Planning Toolkit - Module 1: Determine your approach to workforce planning

Now playing

Design and Build a Strategic Workforce Planning Toolkit - Module 2: Establish a plan for collaborating with functional leaders

Now playing

Design and Build a Strategic Workforce Planning Toolkit - Module 3: Design your forecast framework to understand workforce supply, demand, and gaps

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Design and Build a Strategic Workforce Planning Toolkit - Module 4: Understand strategies to address workforce needs and prepare to implement the workforce planning process


Design and Build a Strategic Workforce Planning Toolkit

Create a workforce planning toolkit that will ensure the right talent is available when and where it is needed.

Executive Summary

McLean & Company

It is common practice to continually reassess customers, markets, and products in today’s VUCA environment, but there is often no parallel assessment of workforce composition. Leaders need to be planful and develop a strategy that positions their organization to take advantage of change rather than fall victim to it.

Situation

  • Today’s rapidly changing operating environment is making it increasingly difficult to get the talent needed to execute on organizational strategies using traditional reactive talent management practices.
  • 73% of executives predict significant industry disruption in the next three years, which will further transform the skills and roles needed (Mercer, 2019), and workforce planning is the solution: 60% of HR professionals rank strategic workforce planning as critically important to the organization’s ability to achieve business and HR goals (SHRM THRIVE360 HRMG, 2020; N=836).

Complication

  • But organizations struggle to implement workforce planning. While headcount planning is a process most organizations are comfortable with, workforce planning is a more complex undertaking that involves more stakeholders, more quantitative and qualitative data, and longer planning horizons.
  • A lack of suitable data and internal expertise on designing and applying workforce planning means that many organizations apply it infrequently, improperly, or not at all.

Solution

  • Start the workforce planning journey by designing the process and planning for the different stakeholders and analyses that will be involved.
  • Implement a clear and straightforward workforce planning process aligned with organizational capabilities and maturity to make workforce planning achievable and attain the benefits of this strategic planning process.

Operating environments are increasingly in flux, and the nature of work is rapidly changing

In today’s volatile, uncertain, complex, and ambiguous (VUCA) world, it can be hard for organizations to keep up. With organizational disruption, shifting talent requirements, and changing workforce demographics, it’s more critical than ever to develop a plan for how to meet the organization’s future talent needs.

Organizational disruption

  • 73% of executives predict significant industry disruption in the next three years, which will further transform skills needed in the future (Mercer, 2019).
  • 2x The number of mergers and acquisitions worldwide each year has nearly doubled since 2002, resulting in increasingly complex organizations (IMAA, 2020).

Shifting talent requirements

  • 42% of core workforce skills are projected to fundamentally change (World Economic Forum, 2018).
  • The changing division of work between humans, machines, and algorithms will displace 75 million current jobs while creating 133 million new jobs (World Economic Forum, 2018).

Changing workforce demographics

  • Workforce participation of older workers is increasing. By 2028, 1 in 4 employees is expected to be over the age of 55 (US Bureau of Labor Statistics, 2020).
  • The number of young adults in the global workforce is decreasing, largely due to increasing rates of educational enrolment (ILO, 2019).

McLean & Company Insight

It is common practice to continually reassess customers, markets, and products in today’s VUCA environment, but there is often no parallel assessment of workforce composition. Leaders need to be planful and develop a strategy that positions their organization to take advantage of change rather than fall victim to it.

Having the right talent in the right place at the right time is more critical than ever

Executives are increasingly concerned about talent now and in the future

  • 50% of organizations report that a shortage of skilled talent is one of the top three challenges they’re currently facing (Ceridian, 2020)
  • 59% of organizations expect to experience a labor shortage in the next two years (Ceridian, 2020)
  • A timeline titled 'Growing CEO Concern Over Skills Availability' from 2011 to 2019. Points on the timeline are labelled individually with the first two years at 56% and 53% and the final two years at 80% and 79%. Adapted from PwC, 2019

Organizations that focus on future talent with workforce planning outperform those that don’t

  • 60% of HR professionals rank strategic workforce planning as critically important to the organization's ability to achieve business and HR goals (SHRM THRIVE360 HRMG, 2020; N=836).
  • 12% | Organizations with mature and robust workforce planning have talent, HR, and business outcomes that are 12% higher than organizations without workforce planning (Sierra-Cedar, 2019).

A review of research on workforce planning found multiple studies linking its use to improvements in:

  • Revenue and profit growth
  • Market share
  • Customer satisfaction

A workforce plan is critical to meeting talent needs and setting the organization up for success

Workforce planning (WFP) is key to developing and executing organizational and talent strategies.

Workforce planning is the process of forecasting and planning for gaps in talent supply and demand to ensure the organization has the workforce needed to achieve its goals. It can be done for the entire organization or only for specific segments.

Workforce planning:

  1. Pinpoints the critical talent needed to execute strategic initiatives (the talent demand).
  2. Enables leaders to understand the makeup of their current workforce and how well prepared it is to achieve strategic initiatives (the talent supply).
  3. Identifies the required talent by uncovering the difference between supply and demand (the talent gap) and determines the best way to procure that talent.

A visualization of chain links labelled 'Organizational Strategy' and 'Talent Strategy' with two pieces of the links separated. The piece from 'Organizational Strategy' is '1. Talent Demand', the piece from 'Talent Strategy' is '2. Talent Supply', and the space between them is '3. Talent Gap'.

Successful workforce planning enables HR departments to better meet the needs of their organization, resulting in improvements in key organizational metrics such as total labor costs, cost per hire, retention, time to productivity, overall workforce productivity, and procurement/vendor costs (for contingent workers).

The workforce plan becomes an input into other HR strategies, influencing the Talent strategy, D&I strategy, L&D strategy, and others.

“Strategic workforce planning is about having the right conversation at the right time, enabling evidence-based decisions that prepare you to take action to optimize future opportunities and challenges, ahead of the competition.” (Martin Oest, Director and Partner, True Picture Europe Limited)

WFP is a strategic planning process that requires significant work prior to execution

HR needs to complete a significant amount of work prior to launching WFP, including:

  • Developing a customized strategic workforce planning process.
  • Building tools and frameworks to assist with the workforce planning process.
  • Identifying the role of functional leaders, finance, and other key stakeholders throughout the process.

This blueprint will help you create a workforce planning process (like the one below) and a toolkit that will support the execution of the process when it is implemented.

This blueprint will help with the creation of the process below. See McLean & Company’s Supply and Demand Forecasting Job Aid for detailed guidance on conducting supply and demand projections.

Sample Process
Engage stakeholders for the workforce needs analysis Conduct demand projection Integrate financial headcount planning and budgeting Conduct critical role analysis Identify and roll up gaps Create action plan to address gaps (buy, build, borrow, redeploy) Input into HR strategies
Conduct supply projection

Follow McLean & Company’s four steps to develop a WFP process that fits your organizational context

1. Initiate WFP Design 2. Build the Analysis Toolkit 3. Design the Forecast Framework 4. Establish Integration Points
  • Outcome & scope
  • Existing resources
  • Required data
  • Strategy
  • Internal labor market
  • External environment
  • Critical role analysis
  • Supply projection
  • Demand projection
  • Finance
  • Talent Strategy
  • Talent Acquisition
  • Talent Management
  • Compensation
  • Learning & Development
After completing this step you will have:
  • Defined the scope
  • Set clear goals
  • Reviewed the current state
  • Created a toolkit that enables leaders to effectively identify the needs of their workforce
  • Determined the approach to critical roles
  • Created a framework for creating supply and demand projections
  • Decided how results will connect to related programs and processes
  • Created a project plan

McLean & Company Insight

While the overall approach to WFP is relatively consistent, the details of how it can best be applied in organizations are varied and nuanced. Identify WFP practices and processes that fit your organization’s needs and capabilities to ensure the right talent is available at the right time.

Step 1

Initiate Workforce Planning Design

1. Initiate WFP Design2. Build the Analysis Toolkit3. Design the Forecast Framework4. Establish Integration Points
  • Outcome & scope
  • Existing resources
  • Required data
  • Strategy
  • Internal labor market
  • External environment
  • Critical role analysis
  • Supply projection
  • Demand projection
  • Finance
  • Talent Strategy
  • Talent Acquisition
  • Talent Management
  • Compensation
  • Learning & Development

After completing this step you will have:

Define the desired outcome and scope of workforce planning activities

Desired outcome

Clearly identify what is driving the need for workforce planning. Typical drivers include:

  • Improved ability to forecast headcount demand, large-scale organizational transformations, supporting departments/divisions in strategic planning, regional expansions, merger & acquisition (M&A) activity, or initiatives to right-size the workforce.

Take note of any predetermined outcomes of workforce planning.

  • E.g. We have an aging workforce and want to project retirements.

Scope

The scope impacts the complexity of the process as well as the amount of required resources. Answer the following questions to identify the scope:

  • Target area(s): Will workforce planning be conducted for the entire organization or for specific segments?
    • Common segments include critical roles, departments, or work units.
  • Integration: Does the resulting workforce plan need to be integrated into a single view or can it remain segmented by department?
  • Timeline: How quickly does this need to be completed?
  • Continuity: Is this a one-off project or is a robust and ongoing capability being built?
  • People resources: Are dedicated resources available for workforce planning?
  • Buy-in: What level of buy-in and support is available from key stakeholders (especially leadership)?

Document these decisions in the Workforce Planning Process Worksheet. Projects with a large scope would benefit from completing a formal project charter using McLean & Company’s Standard Project Charter template.

Identify talent sources to be included in workforce planning

The workforce will generally fall into two broad categories: employees and contingent workers. It is important to identify these different categories in your organization to get a holistic picture of how work is being done, identify if it is being done by the appropriate type of talent, and help guide workforce analysis.

Regular Employee

This category includes traditional work arrangements. These are individuals who are recorded as employees by the organization, engaged on an ongoing basis, and awarded certain benefits and privileges as dictated by the law. Examples include:

  • Full-time employees
  • Part-time employees
  • Temporary employees, such as summer workers

Contingent Worker

This category encompasses various non-traditional work arrangements that have increasingly appeared as a result of the gig economy. These individuals are often not recorded as employees by the organization, are typically engaged for a fixed period of time, and are sometimes not awarded benefits of employment under the law. Examples include:

  • Independent contractors
  • Temporary agency workers
  • Casual workers
  • Consultants

Create standard definitions of employee and contingent worker that suit your organization. Use these definitions consistently to ensure that everyone is on the same page and to facilitate accurate data collection on each type of worker.

Employment relationships are dictated by legislation. Ensure that your definitions of employee and contingent worker are compliant with jurisdictional requirements.

McLean & Company Insight

Contingent workers are often managed outside of HR. Collecting information (headcount, salaries, performance, etc.) will likely require cross-department collaboration, but including it in workforce analysis will provide a full picture of talent at the organization, making the extra effort well worth it.

Select metrics to track the impact of workforce planning and demonstrate value to stakeholders

Sample Workforce Planning Goals Sample Metrics
Reduce talent gaps
Increase the number of critical roles with succession plans by 20% by the next fiscal year.
  • Percentage of critical positions with a talent pool
  • Internal movement rate
  • Percentage of protected groups in critical roles
Increase workforce productivity
Increase workforce productivity by 5% by the next fiscal year.
  • Project completion rate
  • Revenue per FTE
  • Value added by human capital
Increase organizational profit
Increase profit by 10% by the next fiscal year by increasing workforce productivity and decreasing workforce costs.
  • Voluntary turnover rate
  • Cost of turnover
  • Profit per FTE
Forecast accurately
Project talent gaps with 80% accuracy in the first year, increasing to 90% over the next three years.
  • Difference between projected number vs. actual number
  • Average accuracy rate

Use McLean & Company’s HR Metrics Library for a variety of HR metrics.

Document goals and metrics in the Workforce Planning Process Worksheet.

Inventory existing resources that will help facilitate workforce planning

Talent Frameworks

Competency Framework *Highly Recommended*

McLean & Company defines competency as the knowledge, skills, and attributes (KSAs) required for a role. Having a competency framework provides two key advantages:

  • Creates a common language that makes it easier to aggregate results and get an organization-wide view of the workforce.
  • The work of identifying key KSAs at a role level has already been completed and workforce planning can focus on how these need to change, minimizing the work required.

Use McLean & Company’s Develop a Comprehensive Competency Framework blueprint for more information.

Skills Inventory

A skills inventory provides more detailed and accurate information on the skills that exist in the workforce; however, these are extremely resource intensive to create and maintain.

See McLean & Company’s Identify Skills of the Future and Create and Leverage a Skills Inventory blueprints for more information.

Other

Other frameworks can be used, but these are typically more ad hoc and difficult to use at an organizational level (they may be enough for segmented workforce planning). These include:

  • Job descriptions
  • Performance appraisal results
  • Learning needs assessments

People (Core WFP Team)

There can be a significant amount of work required to create and maintain a workforce planning process. The size of the core team will vary depending on scope, but to develop an ongoing capability in WFP it’s recommended to have a core team that includes:

  • 1+ person to manage the process
  • 1+ person to facilitate data analysis

Supporting WFP will make up most of their workload and cannot just be a task that’s added onto existing work duties.

Technology

HRIS, resource management software, and even dedicated workforce planning software contain valuable data on the existing workforce and tools that will support the workforce planning process.

See the next slide for more information on required data

Document resources in the Workforce Planning Process Worksheet.

Identify and audit required baseline data for workforce planning

Effective workforce planning is usually driven by data that captures the current state of the workforce. Incomplete, inaccurate, or fragmented data adds to the complexity of workforce planning.

Essential Data:

  • From HR systems:
    • Role and headcount data (the cleaner, the better)
    • Historical turnover
  • From finance or strategic planning:
    • Growth projections

McLean & Company Insight

The right data will make the workforce planning process easier and more accurate. However, workforce planning can still add value without great data. Clean what is possible and use what you have.

Common Supplemental Data:

  • Total labor costs: This supports budgetary decisions and informs the practicality of projected headcount.
  • Employee movement or attrition rates: This provides a more accurate view of supply projections (discussed in Step 3) compared to turnover by including things like leaves of absence, transfers, promotions, and absenteeism rates.
  • Employee demographics: Clear views of employee demographics can help spot potential issues (like a pending wave of retirements within a department); it is also possible to model future diversity and identify where additional intervention is needed.
  • Time to hire and/or time to productivity: These metrics inform how far in advance hiring or training needs to happen to ensure the talent is in place in time to meet strategic objectives.

Common Data Challenges

  • Similar roles have different titles, resulting in almost as many roles as FTEs.
    • Use job families as the unit of analysis instead of roles.
  • Job codes have not been updated or harmonized, so even roles with the same titles may be viewed differently in the system of record.
    • At the functional or departmental level, manually grouping roles together can be effective. However, for an organization-wide view, the data must be cleaned.
  • Many organizations struggle to export even basic HR data from their systems for analysis.
    • Partner with IT to access the required data.

Refer to Become a Data-Driven HR Function for help improving data governance.

Determine who is responsible for workforce planning in the organization

Human Resources

HR is the driver and owner of workforce planning. They:

  • Establish the process and tools.
  • Make the case for workforce planning and gain stakeholder buy-in.
  • Identify and clearly communicate the accountabilities of stakeholders.
  • Facilitate workforce planning discussions.
  • Contribute knowledge of labor trends.
  • Develop action plans to address gaps with organizational leaders.

Functional Leaders

These leaders are active partners in workforce planning because they understand what talent is needed to succeed and it helps them achieve their strategic objectives.

Functional leaders:
  • Champion the workforce planning process within their units.
  • Include the broader management team and HR in all talent discussions.
Function management team:
  • Actively participate in talent discussions.
  • Complete necessary parts of the process.
  • Provide the data and information required for analysis.

Other Stakeholders

Other stakeholders support WFP by offering expertise and resources where necessary. They typically include:

  • Finance: Finance often controls the headcount planning process (approving budget for headcount on an annual basis). Even if workforce planning becomes controlled by HR, many of the tools and processes developed by Finance may be useful.
  • Procurement: If contingent workers are included in the scope, Procurement is often the department that manages this portion of the workforce.
  • IT: Involve IT to identify large planned technology investments, as these will often require changes to the workforce.

McLean & Company Insight

Collaborate with Finance to combine workforce planning and headcount forecasting processes. It’s a win-win scenario, improving the accuracy and impact of both while eliminating any duplication of work.

Step 2

Build the Analysis Toolkit

1. Initiate WFP Design2. Build the Analysis Toolkit3. Design the Forecast Framework4. Establish Integration Points
  • Outcome & scope
  • Existing resources
  • Required data
  • Strategy
  • Internal labor market
  • External environment
  • Critical role analysis
  • Supply projection
  • Demand projection
  • Finance
  • Talent Strategy
  • Talent Acquisition
  • Talent Management
  • Compensation
  • Learning & Development

After completing this step you will have:

  • Created a toolkit that enables leaders to effectively identify the needs of their workforce.
  • Customized the Workforce Planning Discussion Guide and Workforce Planning Discussion Notebook.
  • Completed part 2 of the Workforce Planning Process Worksheet.

In this step you will design the process to uncover workforce needs with functional leaders

Workforce needs: The change in, or addition of, requirements for the workforce such as skills, competencies, roles, locations, demographics, functions, structure, etc.

In this step you will develop an analysis toolkit to support discussions with functional leaders by:

  1. Choosing an approach to engage functional leaders in these discussions.
  2. Selecting key questions and analyses to take into discussions.
  3. Creating an agenda for the discussions.

Throughout this step, look for this symbol and use McLean & Company’s Workforce Planning Discussion Guide to guide the conversations. By the end of this step you will have a customized guide that will provide structure when these discussions are held. When holding discussions, document insights and notes in the Workforce Planning Discussion Notebook.

Conducting a preliminary analysis with functional leaders to uncover workforce needs serves two main purposes:

  1. Uses functional leaders’ in-depth understanding of business context, strategy, and needs to inform the workforce plan.
  2. Builds trust and buy-in with functional leaders to create and execute the workforce plan.

Select the functional leaders that will be involved in the workforce needs analysis

Functional NOT organizational

The workforce needs analysis will cover the functional leader’s span of control (e.g. team, department) rather than the entire organization.

Conduct a workforce needs analysis with each functional area within the scope defined in Step 1. If desired, all analyses will be rolled up after they are all completed, as further discussed in Step 3.

Target functional leaders who are junior enough to know how work gets done on their team but senior enough to have visibility into strategy (typically mid-level/directors).

Document functional leaders in the Workforce Planning Process Worksheet.

“Senior leaders are often too accustomed to ‘their way of work’, not what the future of the workforce needs to look like. You need to bring diverse perspectives into these conversations to look beyond the status quo.” (Philip Mische, PRM Strategic Consulting)

McLean & Company Insight

HR cannot do workforce planning alone. Functional leaders provide unique knowledge and perspectives about workforce needs, and their collaboration ensures that projections and plans accurately reflect the realities of the organization. However, the extent of the collaboration depends on the available HR resources and how much of a priority it is for the leaders.

Determine the level of collaboration with functional leaders

There are three typical approaches to conducting a workforce needs analysis with functional leaders. The approach selected will depend on the resources available and the organizational culture.

  1. Highly collaborative: Conduct all analysis and structured discussions in close partnership with functional leaders over the course of several touchpoints or one longer one.
  2. Semi-collaborative: Ask functional leaders to conduct some analysis in advance and review the analysis along with a structured discussion in one touchpoint.
  3. Semi-independent: Conduct the analysis without functional leader input (leverage internal subject matter experts as appropriate) and send them a list of questions to answer along with analysis results for validation. No meetings.

McLean & Company recommends the first or second approach (highly or semi-collaborative), but it may not be feasible depending on resources and context.

Document selected approach in the Workforce Planning Process Worksheet.

There are three elements that inform workforce needs that will be analyzed with functional leaders

  • Strategic Vision
    Leaders’ vision for the future of their business unit, the steps they envision taking to get there, and important opportunities along the way will inform workforce needs.
  • External Environment
    Certain factors of the external environment will impact workforce needs and how difficult it will be to get the required talent from the market.
  • Internal Labor Market
    Analyzing the internal labor market (the talent that currently exists or is being developed within the organization) informs how existing roles, skills, and competencies need to change in the future.

In the following slides, determine what the analysis of each of these sources will involve and document decisions in the Workforce Planning Discussion Guide:

  • Mandatory
    At minimum, select and/or customize the questions in the Workforce Planning Discussion Guide.
  • Optional
    Select optional analyses that will be used to supplement the discussion questions. Additional analyses can be used to provide a more in-depth and detailed analysis or to augment or replace information that may be lacking.
    • An 'Optional analysis' icon. Look for this optional analysis icon in the following slides for more information on possible additional analyses and when to use them. Note: These often have been completed for other strategic planning exercises (e.g. by a strategic planning function or during the creation of a talent strategy) and can be reused to save time. Examine the findings through the lens of the leaders’ function and draw out relevant workforce needs.

McLean & Company Insight

It’s important to understand what functional leaders think are the organization’s greatest opportunities and challenges and what the impacts on the workforce will be, despite how difficult it is to predict the future. Encourage leaders to share their gut feelings even if they can’t be 100% sure about them.

Determine how to examine the impact of the strategic vision on the functional leaders’ workforce

When analyzing the strategic vision, examine three key aspects – culture, organizational strategies, and HR strategies – and their implications for the leader’s function. Spend the most time discussing organizational strategies, where functional leaders’ knowledge is likely greater than HR’s.

Reference Documents
Organizational culture The organization’s mission, vision, and cultural values highlight the workforce needs that are important to the organization’s success. This should be explored in the leader’s specific context.
  • Mission, vision, and values
Organizational strategies Organizational and/or departmental strategies are key to understanding and predicting workforce needs. Functional leaders can expand on documented strategies by exploring how their workforce enables and facilitates reaching organizational objectives in their specific area.
  • Strategic plan
  • D&I strategy
  • Financial information
HR strategies While workforce planning typically informs HR strategies, existing HR strategies can supplement the analysis of workforce needs. The insights used to construct these can shed light on strengths, weaknesses, and desired changes within the function.
  • Talent (HR) strategy
  • Talent Acquisition or L&D strategies

Identify what documentation is available to provide to functional leaders in advance of the discussion.

An 'Optional analysis' icon. SWOT analysis: Use if the organizational strategy is unclear to provide clarity and insights on strategic priorities and their implications for the leader’s function (use McLean & Company’s Strategy Exploration Guide).
Scenario planning: Use when there is a high degree of uncertainty as to what the future holds for the organization and how that impacts the function (see Step 2 of the Prepare for External Risks storyboard).

Refer to the Workforce Planning Discussion Guide to select questions and topics to discuss with functional leaders. Add any additional questions or analysis (e.g. SWOT analysis).

Select environmental scanning techniques to identify how external conditions will impact workforce needs

External operating environment External labor market
The external operating environment is constantly changing, influencing what skills, competencies, or roles the workforce must have. Analyzing the external labor market provides information on how difficult it is to get the talent you need, informing decisions around hiring and skills development.
Use the Workforce Planning Discussion Guide to select and/or add questions you would like to ask functional leaders about the external operating environment and labor market and their impact on the workforce within their function. Select additional analyses if they suit your context and scope:
An 'Optional analysis' icon. SWOT analysis: Use if information on external opportunities and threats is scarce (use the Strategy Exploration Guide). An 'Optional analysis' icon. Detailed external labor market analysis: There is a variety of free resources that highlight key labor force trends for specific geographies, industries, and roles, like the Occupational Information Network (O*Net). More detailed local data can also be purchased from vendors.
PESTLE analysis: Use if there is a lack of knowledge of the key external factors impacting your industry (use the Strategy Exploration Guide).

See Appendix A for a detailed list of resources to obtain additional information and data on external factors to complete these analyses.

Identify how to examine the internal labor market using the best information available

Analyzing the internal labor market, or the talent that currently exists and is being developed within the organization, helps the organization understand how segments of the workforce need to change in the future. It can also highlight necessary changes to organizational structure to ensure you have the right people in the right places.

Refer to the Workforce Planning Discussion Guide to select the questions you would like to ask functional leaders.

WITH a talent framework:

Use the talent framework selected in Step 1 to frame these discussions around existing talent and how it needs to change. Competency frameworks, skills inventories, or alternative frameworks help keep these discussions short and language consistent across different functions.

  • Competencies are easy to aggregate across the organization, and KSAs at the role level have already been identified.
  • Skills provide more detailed and accurate information on the skills that exist in the function.
  • Other frameworks (e.g. job descriptions) can be used but may be more difficult to keep consistent across the organization.

WITHOUT a talent framework:

If no talent framework is available, performance data (e.g. annual reviews) and/or talent assessment data (e.g. 360 results) can also inform these discussions.

McLean & Company Insight

Using a talent framework is critical if functional workforce plans will be rolled up to provide an organization-wide view of workforce needs. They also will reduce the work involved each year by providing a clear and consistent baseline for discussions.

Create an agenda for discussions with functional leaders

The agenda will depend on the approach and additional analyses selected in the prior slides. Below are three example agendas, each reflecting a different approach to these discussions:

  1. Highly collaborative

    • Pre-meeting: Share relevant strategic documents.
    • Meeting 1:
    • Meeting 2:
      • Discuss External Environment questions in the Workforce Planning Discussion Guide.
      • Conduct PESTLE analysis and discuss insights.
    • Meeting 3:
      • Discuss Internal Labor Market questions in the Workforce Planning Discussion Guide.
      • Explain next steps in the workforce planning process and leave time for questions.
  2. Semi-collaborative

    • Pre-meeting: Share relevant strategic documents; stakeholders conduct analysis.
    • Meeting:
      • Introduction.
      • Discuss Strategic Vision questions in the Workforce Planning Discussion Guide.
      • Review completed PESTLE template and discuss insights.
      • Discuss External Environment questions in the Workforce Planning Discussion Guide.
      • Discuss Internal Labor Market questions in the Workforce Planning Discussion Guide.
      • Explain next steps in the workforce planning process and leave time for questions.
  3. Semi-independent

    • Conduct analysis without stakeholder input.
    • Send a list of discussion questions from the Workforce Planning Discussion Guide for stakeholders to answer and send analysis results for validation.

Regardless of approach, share the consolidated notes of workforce needs with relevant functional leaders to validate their feedback and allow them to add anything they may have missed after having some time to reflect on the conversation.

Document the agenda in the Workforce Planning Discussion Guide.

Step 3

Design the Forecast Framework

1. Initiate WFP Design2. Build the Analysis Toolkit3. Design the Forecast Framework4. Establish Integration Points
  • Outcome & scope
  • Existing resources
  • Required data
  • Strategy
  • Internal labor market
  • External environment
  • Critical role analysis
  • Supply projection
  • Demand projection
  • Finance
  • Talent Strategy
  • Talent Acquisition
  • Talent Management
  • Compensation
  • Learning & Development

After completing this step you will have:

  • Determined the approach to critical roles.
  • Created a framework for creating supply and demand projections.
  • Determined whether workforce plans will apply across the entire organization or for each function.
  • Completed part 3 of the Workforce Planning Process Worksheet.

Customize the supply and demand forecast framework

This step will walk through the decisions needed to formalize your supply and demand forecast framework (used to create supply and demand forecasts with functional leaders). Building a supply and demand forecast involves using many of the data and insights that will be gathered from functional leaders using the analysis toolkit from Step 2.

For guidance on conducting a supply and demand forecast and instructions on using McLean & Company’s Workforce Planning Workbook, see the Supply and Demand Forecasting Job Aid.

Document the answers to the questions below in the Workforce Planning Process Worksheet.

There are four key aspects of creating your supply and demand forecasts that must be decided up front:

  1. How far into the future will you be forecasting?
    • McLean & Company recommends a three-year forecast. Given the VUCA nature of the operating environment, forecasts beyond three years are often too uncertain to be useful, though this may depend on your industry and geography.
    • However, workforce planning is usually aligned with the organization’s strategic timeline.
  2. How will you be conducting the analysis to create the forecasts?
    • Will you use the Workforce Planning Workbook, a custom spreadsheet, a specialized technology solution, or existing functionality in an HRIS system?
    • McLean & Company recommends using a combination of human intuition and data analysis to drive the forecast.
  3. Who are the non-functional stakeholders who will be involved in the forecast?
    • McLean & Company recommends involving Finance. They can help with some of the metrics and data required for advanced analysis (see the Supply and Demand Forecasting Job Aid for more details).
    • IT or business intelligence functions can also assist with data analysis if the capability does not exist within HR.
  4. Will forecasts be created in a top-down or bottom-up manner (e.g. will manager- or director-level leadership be involved in the analysis for their teams, or will functional leads determine the forecasts for their entire function)?
    • McLean & Company recommends top-down forecasts in functions where the span of control for the functional leader is relatively small (‹100 employees) and bottom-up forecasts for large functions or those that desire a more granular, detailed forecast.

Determine whether formal predictive techniques are appropriate for demand projections

If formal predictive activities have already been done at an organizational level, use them as a starting point or as a replacement for the techniques on this slide.

Delphi technique Scenario planning
Definition Stakeholders anonymously complete a questionnaire that is shared with the group. They then complete the same questionnaire taking into account the responses of other stakeholders, repeating the process until a consensus or predetermined number of iterations (typically three) is reached. Stakeholders are asked to consider not just the desired future state but also different scenarios that could occur. This can include environmental factors like a pandemic or economic recession or just best, projected, and worst-case scenarios.
Use case When stakeholders are not able to collaborate directly or there’s a strong desire to mitigate bias in the forecasting process. When there is a particularly high amount of uncertainty in the environment or uncontrollable factors that could impact future plans.
Advantages
  • The anonymity of the process allows for collaboration without bias and more accurate forecasts.
  • Helps identify common ground between disparate stakeholders to build consensus.
  • Provides a broad view of how different stakeholders perceive the future.
  • Mitigates the risk inherent in the VUCA environment all organizations now operate in by planning for several different possibilities.
Disadvantages
  • It can take a long time to complete even if only completing a limited number of iterations.
  • It can be difficult to administer with a large number of stakeholders.
  • Requires projections to be created multiple times for different scenarios, resulting in additional work and resources needed.

Workforce planning forecasts can be done without stakeholder involvement by referring to data collected through interviews in Step 2. If you involve stakeholders, these techniques will help elicit valuable additional feedback.

For more information on conducting scenario planning, see McLean & Company’s Prepare for External Risks blueprint.

Document decisions in the Workforce Planning Process Worksheet.

Decide how critical roles fit into the workforce planning process

The scenario you will follow depends on the scope of your workforce planning (WFP) process and whether you have chosen to include all roles or only critical roles in the process. Document your selection in the Workforce Planning Process Worksheet.

Scenario A: WFP includes all roles

When workforce planning encompasses all roles in a segment, the critical role analysis serves as an input into your demand and supply forecast.

  • In this scenario, the supply and demand forecast is completed for all roles first. Then, the critical role analysis is conducted and the supply and demand forecasts for critical roles are revisited and tweaked to account for the critical role analysis.
  • This simplifies the forecasting process: instead of creating a forecast for two different types of roles (critical and non-critical) simultaneously, all roles are treated equally, and the forecast for critical roles is revisited after the completion of the critical role analysis.

Scenario B: WFP includes only critical roles

When the scope of workforce planning is focused only on critical roles, critical role analysis must come before conducting the demand and supply forecasts.

  • In this scenario, critical roles and the skills, competencies, and other relevant data will be analyzed first and serve as an input into the supply and demand forecasts.

McLean & Company Insight

Whether your scope includes all roles or just critical roles, it’s essential to conduct the critical role analysis: it allows you to focus your efforts on the roles that will make the biggest impact on your organization and is what separates workforce planning from headcount planning.

For more information on conducting and using the critical role analysis, see the following slides and the Supply and Demand Forecasting Job Aid.

The following two slides show examples of the forecasting process for each scenario

Example: Forecasting process for critical roles

Scenario A: WFP includes all roles

A process workflow with three levels: 'Demand Projection', 'Supply Projection', and 'Critical Role Analysis'. The process begins in 'Demand Projection' with steps: 'Establish a baseline estimate for headcount and/or revenue growth', then 'Tweak the baseline estimate for each role in the segment based on workforce needs'. It then moves to 'Supply Projection' with steps: 'Use historical attrition data (turnover, retirement, etc.) to create a baseline talent supply projection', then 'Use stakeholder insights and estimates to tweak the baseline supply projection'. It then moves to 'Critical Role Analysis' with steps: 'Identify critical roles to executing on organizational strategy', then 'For critical roles, examine skills, competencies, and other data to understand how the needs of those roles will change', then 'Adjust critical roles or create new roles where needed'. It then ends in both Demand and Supply Projection with 'If necessary, return to talent supply and demand projections and adjust projections for critical roles based on the additional analysis conducted and changes made'.

Example: Forecasting process for critical roles

Scenario B: WFP includes only critical roles

A process workflow with three levels: 'Demand Projection', 'Supply Projection', and 'Critical Role Analysis'. The process begins in 'Critical Role Analysis' with steps: 'Identify critical roles to executing on organizational strategy', then 'For critical roles, examine skills, competencies, and other data to understand how the needs of those roles will change', then 'Adjust critical roles or create new roles where needed'. It then moves to 'Demand Projection' with steps: 'Establish a baseline estimate for headcount and/or revenue growth', then 'Tweak the baseline estimate for each role in the segment based on workforce needs'. It then moves to 'Supply Projection' with steps: 'Use historical attrition data (turnover, retirement, etc.) to create a baseline talent supply projection', then ends with 'Use stakeholder insights and estimates to tweak the baseline supply projection'.

Prepare to identify critical roles

Critical roles are unique to each organization and depend on the strategic direction of the organization at a point in time, so they will even change within an organization from year to year. Determine the criteria used to identify critical roles and how many roles will be classified as critical.

  • If critical roles have already been identified as a part of another organizational process (e.g. succession planning), use those roles instead of repeating the identification process.
  • McLean & Company recommends examining at least the four critical role criteria when examining roles, though there will also be unique factors for your organization that impact criticality.
  • Aim to identify 5-10% of roles in scope as critical.

Critical Role Criteria

  • Strategic Value
    The importance of the role in enabling the organization to achieve its strategic objectives.
  • Rarity
    How difficult it is to find and develop the skills or competencies in the role.
  • Revenue Generation
    The importance of the role in maintaining revenue-generating activities for the organization.
  • Business/Operational Continuity
    The importance of the role in maintaining the day-to-day operations of the organization.

Many leaders are not accustomed to thinking about their roles in this manner, so if this is the first time the organization has gone through the critical role identification process, it can take a lot of time. If this is not the first time, lean on the previous work to make the process faster.

Document any additional criteria in the Workforce Planning Process Worksheet.

McLean & Company’s Critical Role Identifier tool will help you measure the criticality of roles by answering questions related to these four criteria. It will also allow you to create custom criteria to fit your organization’s strategic needs and weight the different criteria to represent the different level of importance of each.

Decide whether plans will stay on a functional level or be rolled up to an organization-wide plan

Workforce plans can exist either at a functional level, where each organizational function has a workforce plan that applies to their specific circumstances, or at an organizational level, where a centralized team manages the workforce plan for the entire organization.

A centralized workforce plan is better for the reasons listed below but can be very challenging to achieve for organizations without the proper resources. Determine which approach you will take by revisiting the scope, outcomes, and available resources defined in Step 1.

Why roll up gaps to the organizational level?

  • Roll-ups permit an organization-wide view of talent gaps and enable talent mobility.
    • For example, one unit may have a critical shortage of a position while another has a surplus. Rather than costly hiring and offboarding, the organization can focus on using development to move resources where they are needed.
  • Roll-ups also enable the identification of gaps that are most detrimental to the organizational strategy, which may differ from those that are most important at a functional level.

Getting an organization-wide view of workforce planning can be a challenge for large organizations. HR technology that can facilitate workforce planning will relieve the significant burden of the manual work required to compare projections and plans across different functions.

Refer to SoftwareReviews’ Workforce Management vendor landscape reports to see how vendors compare in their workforce planning and forecasting features.

Step 4

Establish Integration Points

1. Initiate WFP Design2. Build the Analysis Toolkit3. Design the Forecast Framework4. Establish Integration Points
  • Outcome & scope
  • Existing resources
  • Required data
  • Strategy
  • Internal labor market
  • External environment
  • Critical role analysis
  • Supply projection
  • Demand projection
  • Finance
  • Talent Strategy
  • Talent Acquisition
  • Talent Management
  • Compensation
  • Learning & Development

After completing this step you will have:

  • Decided how results will connect to related programs and processes.
  • Created a project plan.
  • Communicated the process to key stakeholders.

Align related programs with WFP outputs

There are four typical actions that come out of the workforce planning process: build, buy, borrow, or redeploy talent. See Appendix B for guidance on when to use each approach. Regardless of the output of the WFP, it is essential to integrate related programs to realize the value of the plan.

  • Finance
    Coordinate with finance to align the headcount planning and budgeting process with workforce planning.
  • Talent Strategy
    Use the workforce plan as an input into the talent strategy to help inform the prioritization of talent processes, programs, and initiatives critical to executing organizational strategy and meeting workforce needs.
  • Talent Acquisition
    If developing employees is not an option, develop or adjust sourcing strategies and talent pipelines to accommodate roles that need to be bought (i.e. hired).
  • Talent Management
    Review current organizational core competencies to determine if they need to be modified. The WFP output will help inform critical roles and competencies required in succession talent pools.
  • Total Rewards
    Evaluate modified and new roles and look at market data to determine appropriate target market positioning. Adjust total compensation as necessary.
  • Learning & Development
    Build L&D opportunities to support development of the new competencies and/or skills needed in employees to address talent gaps.

Related McLean & Company resources:

McLean & Company Insight

Collecting data, projecting needs, and analyzing gaps are important parts of workforce planning; however, the strategic value comes from the resulting actions. Don’t let the investment in workforce planning go to waste by not acting on the results of the process.

Create a finalized process that ties all the pieces together

Use McLean & Company’s Process Mapping Guide to create a workforce planning process based on the information provided in the previous steps.

Engage stakeholders for the workforce needs analysis. Conduct demand projection. Integrate financial headcount planning and budgeting. Conduct critical role analysis. Identify and roll up gaps. Create action plan to address gaps.
Conduct supply projection.

For each step of the workforce planning process, answer the following questions:

  • Who needs to be involved at this stage? (At minimum? Ideally?)
  • What is the expected time commitment for involved stakeholders?
  • How long do we have to complete this stage?
  • What technology or tools are available to facilitate this stage?
  • Do new technology solutions need to be developed or purchased?

Create a project plan

Outline key implementation milestones and the tasks required to complete them:

  • What gaps need to be addressed to enable the workforce planning process? (E.g. update skills inventory.)
  • What technology needs to be bought and/or optimized? (E.g. buy and implement workforce analytics software.)
  • Who needs to be trained on the new process and procedures? (E.g. train finance on how headcount planning and budgeting fit into workforce planning.)
  • When will the impact of actions on selected objectives and metrics be assessed?
  • How frequently does the workforce plan need to be revisited?

Use McLean & Company’s Project Roadmap Tool to document the required milestones and their tasks along with:

  • Task owners/who is accountable for performing the task
  • Start and completion dates
  • Dependencies and prerequisites

Sample of the 'Project Roadmap Tool'.

Communicate the process to key stakeholders

Leaders

  • Reiterate why workforce planning is important and how it benefits them in achieving their strategic goals.
  • Identify the actions that will require the greatest amount of support from leaders.
  • Detail leaders’ roles in the workforce planning process and in executing necessary workforce changes.
Recommended communication channel:

One-on-one or small group meetings.

HR Employees

  • Ensure HR employees are aware of and understand the driver behind workforce planning and the associated goals.
  • Ensure you highlight the areas that require the greatest amount of their support and effort.
  • Detail accountabilities and expectations for completing actions.
Recommended communication channel:

Departmental meetings or one-on-one meetings.

Other Stakeholders

Determine other stakeholders who may be involved in the workforce planning process or who may be impacted by resulting changes. These may include:

  • Finance: Reiterate the connection between headcount planning and workforce planning.
  • IT: Detail how technological changes and investments impact the workforce.
Always communicate:
  • Their role within the process
  • The importance of their involvement

Use McLean & Company’s Craft an Internal Communications Strategy and Navigate Change blueprints for more advice on communicating the new process and the changes associated with it.

Ensure the workforce planning process is used, reviewed, and renewed

Used

The goal of workforce planning is not the production of reports, dashboards, or presentations; it is to facilitate the improvement of processes and initiatives. Ensure the workforce plan is being used by monitoring the plan and any associated initiatives.

  • If HR owns the workforce planning process then they assume responsibility for monitoring, evaluating, and improving it.
  • Designate this responsibility to a person (or team) and ensure they have time and resources to complete it.

Reviewed & Adjusted

In addition to the metrics selected in Step 1, organizations need to choose metrics that track the progress and success of workforce planning initiatives to help ensure that the workforce plan is effective and to identify any issues that may arise.

Example:

Action Initiative: Reduce time to fill for developers by increasing the size and quality of candidate pipeline.

Metrics: Time to hire for developers, quality candidates per application, number of candidates in pipeline.

Renewed

As an activity focused beyond the immediate future, workforce planning will always be susceptible to the hijacking of resources to address other, more immediate concerns. Maintain a continued commitment to workforce planning even in years when there are not big wins to continually reap benefits.

Remember that the objective of workforce planning is to reduce the size and scale of these crisis events by adequately planning for the future.

“Workforce planning ROI can come several years afterwards; it’s not a machine where you buy one and it automatically produces. You need to keep that story going.” (Anonymous, Analytics & Strategic, Planning Expert)

See McLean & Company’s HR Metrics Library for assistance.

Key insights

Insight 1

It is common practice to continually reassess customers, markets, and products in today’s VUCA environment, but there is often no parallel assessment of workforce composition. Leaders need to be planful and develop a strategy that positions their organization to take advantage of change rather than fall victim to it.

Insight 2

Collaborate with Finance to combine workforce planning and headcount forecasting processes. It’s a win-win scenario, improving the accuracy and impact of both while eliminating any duplication of work.

Insight 3

The right data will make the workforce planning process easier and more accurate. However, workforce planning can still add value without great data. Clean what you can and use what you have.

Insight 4

HR cannot do workforce planning alone. Functional leaders provide unique knowledge and perspectives about workforce needs, and their collaboration ensures that projections and plans accurately reflect the realities of the organization. However, the extent of the collaboration depends on the available HR resources and how much of a priority it is for the leaders.

Insight 5

Whether your scope includes all roles or just critical roles, it’s essential to conduct the critical role analysis. It allows you to focus your efforts on the roles that will make the biggest impact on your organization and is what separates workforce planning from headcount planning.

Insight 6

Collecting data, projecting needs, and analyzing gaps are important parts of workforce planning; however, the strategic value comes from the resulting actions. Don’t let the investment in workforce planning go to waste by not acting on the results of the process.

Leverage Feedback to Drive Performance

Identify impactful initiatives using our diagnostic programs to collect feedback from employees, stakeholders, and the HR team.

Optimize the HR Department for Success

HR Stakeholder Management Survey
Align HR initiatives with business strategy and stakeholder needs.

HR Management & Governance
Improve HR’s core functions and drive project success.

Improve Employee Experience and HR Processes

Pandemic Engagement Pulse Check
Assess the effect of pandemic response plans on employee engagement.

New Hire Survey
Ensure recruiting and onboarding programs are effective by surveying new employees.

Employee Engagement
Move beyond measuring job satisfaction with a comprehensive view of engagement.

McLean Employee Experience Monitor
Evolve to leader-driven engagement with a real-time dashboard and results.

Employee Exit Survey
Understand why people leave the organization to proactively retain top talent.

360 Degree Feedback
Empower employees with a holistic view of their performance to prioritize development.

View our diagnostic programs for more information.

McLean & Company offers various levels of support to best suit your needs

DIY Toolkit

Guided Implementation

Workshop

Consulting

"Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful." "Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track." "We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place." "Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project."

Diagnostics and consistent frameworks used throughout all four options

Appendices

  • Appendix A: Data and resources for an analysis of internal and external labor markets
  • Appendix B: Build, buy, borrow, or redeploy to address talent gaps
    • Identify where it makes sense to build talent
    • Pinpoint where it is necessary to buy talent
    • Identify where you can borrow talent
    • Figure out where talent must be redeployed

Appendix A: Data and resources for an analysis of internal and external labor markets

Look at. Examine. Ask.
Government agencies publish all sorts of information on the state of the country, including demographic information, economic indicators, employment statistics, compensation data, and industry information.
United States:
Canada:
Australia:
United Kingdom:
  • Population information
    • Demographics
    • Immigration rates
  • Economic indicators
    • Gross Domestic Product (GDP)
    • Inflation/deflation
  • Labor market indicators
    • Labor force
    • Labor force participation rate
    • Unemployment numbers/rates
  • Occupational forecasts
    • What occupations are expected to be in demand/surplus in the future?
  • Competencies availability
    • How many graduates are there yearly? In what programs?
    • Are there external institutions providing the training being sought?
  • Competitor employment offers
  • Compensation data
  • Available resources to offset labor costs
  • How tight is the current labor market? Does it favor job seekers or employers?
  • How difficult is it to find desired competencies in the market?
  • Are the competencies we are looking for available in the market at all or do they have to be developed internally?
  • Are the competencies we are looking for highly in demand?
  • Are the desired competencies available locally?

Trends in the market indicate how difficult it is to get the talent you need. This impacts the selection of critical roles and dictates the actions that must be pursued to get the right people in the right place at the right time.

Appendix B: Build, buy, borrow, or redeploy to address talent gaps

Talent Shortage

(Talent demand for a role, segment, or competency/skill is greater than talent supply)

  • Build
  • Buy
  • Borrow

Talent Surplus

(Talent supply for a role, segment, or competency/skill is greater than talent demand)

  • Redeploy

See the following slides for guidance on how to proceed in each of these areas

Identify where it makes sense to build talent

Build: Develop talent within the organization to fill role gaps. This includes promoting ready individuals into gap areas.

Circumstances:

Building talent from within is the best option when:
  • The talent need is ongoing and a critical part of the organization.
  • The talent need is not urgent.
    • Upskilling existing talent takes time. If the talent need is urgent, there may not be time to conceive, develop, and deliver training and development efforts.
    • However, if there is ready talent in the organization to meet the need, it can be filled using promotions.
  • Competencies required are not available or are very limited in the market.
  • The organization has a commitment to learning and development and has the infrastructure and capabilities to develop talent in-house.
  • Resources do not exist to fill needs externally.

Example: Workforce analysis has identified that 30% of directors will retire in three years. The best option would be to implement a leadership development program for middle managers because the need is not urgent, the positions are ongoing and key, and the specified organizational knowledge required for the positions is not available externally.

Use McLean & Company’s extensive talent management and learning & development resources to build talent:

  • Step-by-step blueprints on how to create relevant talent management programs, such as succession planning and different learning & development programs
  • 30+ training decks designed to develop managers, including facilitator’s notes
  • Workshops and advisory services to help kick-start talent management and L&D projects and guide you through them

Check out McLean & Company’s Talent Management and Learning & Development research portals.

Pinpoint where it is necessary to buy talent

Buy: Recruit talent from outside of the organization to fill gaps.

Circumstances:

Acquiring talent from outside of the organization is best when:
  • There are not enough people in the internal talent pipeline to meet the need.
  • The talent need is ongoing.
  • The talent need is urgent.
    • It is generally faster to hire someone into the organization who already has the required competencies than to try to develop the competencies internally.
  • New competencies required as a result of strategy changes or desire for innovation are not available internally.
  • Competencies required are available in the market.
    • Even when acquiring talent externally is the best option, it may still be extremely difficult depending on the labor market and competition for desired competencies. In this case, a specialized recruiting strategy may be necessary with consideration for looking outside of the local market.
  • There are resources available to pay for external talent, which may be costly. This is particularly important if desired competencies are in demand.

Example: Disruption in the industry resulted in the organization pursuing a new market offering that is distinctly different than current offerings. The offering will be launched within the year and requires a whole new team with distinctly different competencies than what currently exists in the organization. The urgency of the need and lack of internal availability makes buying talent the best choice.

Use McLean & Company’s talent acquisition materials to get the external talent you need, even in a tight market:

Check out McLean & Company’s Talent Acquisition research portal for more research.

Identify where you can borrow talent

Borrow: Acquire talent through arrangements other than regular employment to fill gaps. This includes the use of contingent workers.

Circumstances:

Borrowing talent from outside of the organization is best when:
  • The talent need is defined for a specified period of time and not ongoing.
  • The competencies required are new or specialized and do not exist within the organization .
    • Note that this is only for roles and competencies that are not required on an ongoing basis. E.g. Contracting a marketing consultant for a one-off social media campaign.
    • Contingent workers may also be used as a way to introduce new competencies to the organization that will eventually be developed. E.g. A consultant implements new technology and trains workers on it.
  • Talent is required for sudden or cyclical boosts in demand.
  • Significant cost savings may result from contracting out low value work.
  • The need is not a critical role in the organization that produces strategic value because then that knowledge will not reside in the organization.

Example: Every year at fiscal year-end, the accounting function has a lot to get done to meet reporting standards. The workload is beyond the capacity for the existing team, so a worker from a temp agency is hired on for one month to help the team meet its objectives. After the month is done the temp worker is no longer needed.

Figure out where talent must be redeployed

Redeploy: Minimize redundancies and talent surpluses by moving excess workforce to other areas of the organization or reducing the workforce.

Circumstances:

Moving excess talent to other areas of the organization is best when:
  • Individuals in areas where there is a talent surplus have competencies that are transferrable to areas where there is a talent shortage.
  • Competencies in another area of the organization are trainable and the organization has the infrastructure and programs in place to train individuals who have moved from another area of the organization.
  • The excess talent is very expensive to let go.
Reductions in talent are necessary when:
  • Roles become obsolete and those in the roles do not have competencies that are transferrable to other areas of the organization or cannot be trained without excessive effort.
  • There are too many individuals doing a role and not enough work.
  • Available resources and talent budgets change.
  • Roles are not critical and incumbents do not have competencies that are strategically valuable to the organization.

Example: The organization must let go of 50% of customer service representatives because of new automated customer service technology.

Caution: Reductions and redeployments must be fair, planned carefully, and communicated well to minimize fear and related productivity losses.

For more information on redeployment, see the Streamline Your Workforce During a Pandemic research.

Research Contributors and Experts

  • Jane Barrett
    Vice President and Global Head of People Analytics & Digital Solutions, Ericsson
  • Adam Gibson
    Founder & Director, Agile Workforce Planning
  • Gemma Jones
    HR Manager, Spinal Life Australia
  • Priyanka Khosla
    People Insights and Strategic Workforce Planning Specialist, Sobeys
  • Brian Chupp
    Continuing Term Lecturer, Purdue University Krannert School of Management
  • Jeffrey Green
    Director, Talent Acquisition, J.D. Irving, Limited
  • Pamela Kahn
    Head of Workforce Strategy, Global Workforce Planning & Analytics, Ericsson
  • Peter Louch
    Founder and CEO, Vemo
  • Andrew Courtois
    Senior Workforce Strategy and Analytics Master
  • Bobby Guhathakurta
    Manager, Resourcing & Talent Marketing, Deloitte Canada
  • Stephanie Keough
    Budgeting, Vale Canada Ltd.
  • Maria Lovi
    Global Talent Lead, Business for Social Responsibility
  • Michael Manning
    VP, Head of Talent Management Operations & Performance and Development, T. Rowe Price
  • Philip Mische
    Executive Consultant, PRM Strategic Consulting
  • Laurie Richer
    Vice President, Human Resources, EORLA
  • Alyson Weeks
    HR Content Consultant, CIPD
  • Andrew Mayo
    Professor of Human Capital Management, Middlesex University
  • Nina Nazarshoeva
    Director of People Services, International Operations, Canadian Red Cross
  • Ed Schaffer
    CFO, Hired
  • Jackson White
    Manager, Talent Management, Devon Energy
  • Carlene McCubbin
    Director, Organization and Leadership Advisory, Info-Tech Research Group
  • Martin Oest
    Director and Partner, True Picture Europe Limited
  • Cristina Vieira
    Superintendent, Workforce Planning & HR Systems, Vale Canada Ltd.
  • Tien Yancy
    Workforce Management Research Analyst II, The California Public Employees' Retirement System

Works Cited

IMAA. “M&A Statistics – Worldwide, Regions, Industries & Countries.” IMAA, 2020. Accessed July 2020.

International Labour Organization. “World Employment Social Outlook.” International Labour Organization, 2019. Accessed July 2020.

Leopold et al. “The Future of Jobs Report 2018.” World Economic Forum, 2018. Accessed July 2020.

Mercer. “Global Talent Trends 2019.” Mercer, 2019. Accessed July 2020.

Ng-See-Quan, Danielle. “HR’s biggest challenges for 2020 and how to overcome them.” Ceridian, 25 Feb 2020. Accessed July 2020.

PwC. “Talent Trends 2019: Upskilling for a Digital World.” PwC, 2019. Accessed July 2020.

Sierra-Cedar. “Sierra-Cedar 2019–2020 HR Systems Survey White Paper.” Sierra-Cedar, 2 Oct 2019. Accessed July 2020.

US Bureau of Labor Statistics. “Civilian labor force, by age, sex, race, and ethnicity.” Bureau of Labor Statistics, 4 Sept. 2019. Accessed July 2020.

Young, Mary B. “Five Years of Strategic Workforce Planning Research.” Conference Board, 2013. Accessed July 2020.

About McLean & Company

McLean & Company is an HR research and advisory firm providing practical solutions to human resources challenges via executable research, tools, diagnostics, and advisory services that have a clear and measurable impact on your business.

What Is a Blueprint?

A blueprint is designed to be a roadmap, containing a methodology and the tools and templates you need to solve your HR problems.

Each blueprint can be accompanied by a Guided Implementation that provides you access to our world-class analysts to help you get through the project.

Need Extra Help?
Speak With An Analyst

Get the help you need in this 4-phase advisory process. You'll receive 8 touchpoints with our researchers, all included in your membership.

Guided Implementation #1 - Initiate workforce planning design
  • Call #1 - Define scope and review the current state.
  • Call #2 - Review the completed sections of the Workforce Planning Process Worksheet.

Guided Implementation #2 - Build the analysis toolkit
  • Call #1 - Plan to engage stakeholders.
  • Call #2 - Review the customized Workforce Planning Discussion Guide.

Guided Implementation #3 - Design the forecast framework
  • Call #1 - Review and determine the approval to critical roles.
  • Call #2 - Create the framework for supply and demand projections.

Guided Implementation #4 - Establish integration points
  • Call #1 - Decide how results will connect to related HR programs and processes.
  • Call #2 - Create a project plan and communicate to key stakeholders.

Contributors

  • Jane Barrett – Vice President and Global Head of People Analytics & Digital Solutions, Ericsson
  • Brian Chupp – Continuing Term Lecturer, Purdue University Krannert School of Management
  • Andrew Courtois – Senior Workforce Strategy and Analytics Master
  • Adam Gibson – Founder & Director, Agile Workforce Planning
  • Jeffrey Green – Director, Talent Acquisition, J.D. Irving, Limited
  • Bobby Guhathakurta – Manager, Resourcing & Talent Marketing Deloitte Canada
  • Gemma Jones – HR Manager, Spinal Life Australia
  • Pamela Kahn – Head of Workforce Strategy, Global Workforce Planning & Analytics, Ericsson
  • Stephanie Keough – Budgeting, Vale Canada Ltd.
  • Priyanka Khosla – People Insights and Strategic Workforce Planning Specialist, Sobeys
  • Peter Louch – Founder and CEO, Vemo
  • Maria Lovi – Global Talent Lead, Business for Social Responsibility
  • Michael Manning – VP, Head of Talent Management Operations & Performance and Development, T. Rowe Price
  • Andrew Mayo – Professor of Human Capital Management, Middlesex University
  • Carlene McCubbin – Director, Organization and Leadership Advisory, Info-Tech Research Group
  • Philip Mische – Executive Consultant, PRM Strategic Consulting
  • Nina Nazarshoeva – Director of People Services, International Operations, Canadian Red Cross
  • Martin Oest – Director and Partner, True Picture Europe Limited
  • Laurie Richer – Vice President, Human Resources, EORLA
  • Ed Schaffer – CFO, Hired
  • Cristina Vieira – Superintendent, Workforce Planning & HR Systems, Vale Canada Ltd.
  • Alyson Weeks – HR Content Consultant, CIPD
  • Jackson White – Manager, Talent Management Devon Energy
  • Tien Yancy – Workforce Management Research Analyst II, The California Public Employees' Retirement System