Strategic Workforce Management
By Samantha Howland
Senior Consultant and Client Development Director, DSI
“One cannot manage change. One can only be ahead of it.” – Peter Drucker[ 1 ]
This article examines workforce development in the context of current trends and uncertainties related to managing human capital within the corporation. Scenario Planning will be introduced as a structured process offering leaders an approach for addressing future workforce management decisions. It can also serve as a mechanism for organizational learning and strategic thinking.
Strategic Workforce Management
Research has highlighted the importance of strategically managing the organizational workforce. Peter Drucker states that “knowledge-worker productivity is the biggest of the 21st century management challenges.”[ 1 ] Organizational development, change management and nurturing talent have become main stream in the human resource lexicon. Ten years ago HR professionals were not driving investment programs in knowledge management, leadership coaching and human capital as much. And they were seldom garnering sponsorship for these initiatives from such executives as Presidents, Chief Operating Officers or Finance Executives. Workforce management issues have shifted rapidly over the past ten years. As a result, organizations are unprepared to address the skills gap and talent crisis plaguing businesses.
Technology has been a major force of change in the past ten years. As stated in the Hudson Institute’s study, Workforce 2020, “distance is dead.”[ 2 ] No longer can physical boundaries define or confine our work setting. Ten years ago “information access” had drastically different connotations. Today our presence and our work are instantly available, ubiquitous, and mobile. The Internet, a continuously networked world, and the range of available access points assures knowledge availability anytime, anywhere. These advances will only continue.
These changes, along with demographic shifts including an aging population, ethnic diversification, and changing geographic concentrations, continue to impact the availability of labor and skills in the marketplace. A skills gap exists across the US workforce to meet the growing requirements of knowledge organizations and global competition continues to drive the wage gap with rapidly developing countries.
Leveraging our assets
In the knowledge economy, the “knowledge worker” is no longer a pure cost but a core asset that we must properly orient, deploy, motivate and ‘manage’ to achieve our organizational objectives. Knowledge worker productivity demands that we impose responsibility for productivity on the workers themselves. Continuous innovation must come from within. Leaders must provide the right structure, skills and systems to ensure on-going development.
The only possible advantage developed countries can hope to have is in the supply of people prepared, educated and trained for knowledge work.[ 1 ]
Trends & Uncertainties in Managing Human Capital within the Corporation
“Our economic strength flows from our workers, their skills, their motivation, and their treatment.”[ 3 ]
Business leaders need to consider not just the “knowns” in their environment, things we can see coming, but also those unknowns, things that may affect us down the road. Organizations can benefit from instilling a disciplined way to cull through both projected trends as well as uncertainties that may affect their future.
In a survey we conducted in partnership with the Society for Human Resource Management (SHRM), human resource professionals, academics and corporate leaders identified a range of critical forces, such as:
- Healthcare costs and policies
- Technology
- Talent availability
- Global economic impact
- Corporate governance and ethics
- Intellectual property governance
- Education & training requirements
- Security
- Immigration
- Demographic shifts – aging, diversity, geography
- Organization (structures) - work structure drives the demand for high skills.
If forces have a high level of predictability, they are treated as trends. If the path and outcomes of the forces are highly unpredictable, they are deemed to be uncertainties. The forces listed affect near and long-term management decisions about deployment of scarce resources – human resources and capital.
Workforce Management Decisions
“This rapidly changing economy requires workers who are flexible, adaptable, quick learners, critical thinkers and above all else, problem solvers. And these are precisely the skills our schools are not teaching.”[ 4 ]
So how do organizations decide the right structure, skills mix, or sourcing solutions? What do we do today to prepare? Much of the workforce development challenge falls on the organization. Today we embrace and invest in corporate-wide programs, management systems that attempt to address workforce management across a range of functions.
- Hiring & Sourcing
- Training investments
- Compensation systems
- Healthcare benefits
- Virtual/remote management solutions – human and technical
- Social contracts between workers and the organization
- Education solutions – how and where our workers acquire specialized and generalized skill sets critical to the future success of the company
Organizations design competency models, succession plans, leadership programs, corporate universities and even education reimbursement policies. How do we know if we are correctly balancing our investment priorities? How are we ensuring alignment to business strategy with these diverse efforts? Our long-term productivity, imperative to our future, must be aligned by HR recommendations for change.
- 2/3 of company training dollars go to the college educated [ 5 ]
- “Our future depends on having highly skilled, highly motivated workers on the front line. That is not what our education system was designed to produce.” [ 5 ]
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How else can we address workforce management challenges of the future? How can we learn from our past surprises?
In analyzing the forthcoming report “Future Scenarios for Human Resources in 2015”, leaders can identify forces that will impact their futures. Reflecting on how these scenarios impact their own organization is step one. More importantly, leaders must adopt a systematized, consistent method of identifying and monitoring outside forces that will impact future workforce management needs. Do not wait until the strategy is completely defined. Consider the length of time it takes to adapt the workforce, prepare for new situations and adjust strategies accordingly. The full range of strategic workforce management needs will come from looking both outside and within the organization.
In looking at trends and uncertainties affecting the future, leaders can ask themselves:
- What capabilities does your organization currently possess to deal with this possible future?
- Would your organization, as it currently stands, be able to thrive under each scenario?
- What new capabilities would your organization need to develop to succeed in these environments?
- How can you continue to meet the demands of your current business while preparing for these widely divergent futures?
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Scenario Planning for Organizational Learning
Scenario Planning can help you align workforce management strategies that consider multiple futures. It enables more effective decision-making on robust strategies that work across a range of possible futures. It often leads to a broader set of options based on the weak signals in the external environment. Areas may emerge for pilot testing skill development programs, experimentation with new organizational forms, or evaluation of systems for longer-range unknowns.
As Drucker puts it, change leaders see change as opportunity. But they require systematic methods to look for and anticipate change. Some even go so far as to maintain two budgets- one focused on continuity and another on change.[ 1 ] Scenario Planning can offer that systematic approach.
Conclusion
HR managers and all organizational leaders should consider the strategies related to their future workforce if they hope to create success for their organizations over the long haul. HR in particular can help contribute to strategy effectiveness by helping anticipate and address resistance issues – structure, systems, skills and social dynamics based on where the organization is today. In order to achieve agility and prepare the workforce to be well positioned down the road, wherever it may lead, leaders need to look inside and out to identify the right mix of strategies to deploy. The process of continuous learning requires a sharp focus on the external factors that may impact us. The key is to develop strategies and capabilities that will help us succeed no matter what the future brings.
NOTES
[1]
Drucker, Peter F., (1999). Management Challenges for the 21st Century.
Harper Business.
[2]
Judy, Richard W. and Carol D. Amico. (1997). Work Force 2020, Work and Workers in the 21st Century. Indianapolis, Hudson Institute.
[3]
The Aspen Institute. “Grow Faster Together, Or Slowly Grow Apart.”
[4]
Hershberg, Theodore. (March, 1996) “Human Capital Development: America's Greatest Challenge,” popular version of an essay by the same title that appeared in The Annals of the American Academy of Political and Social Science, vol. 544.
[5]
"America's Choice: High Skills or Low Wages. (1990) National Center on Education and the Economy.
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