NEARLY FOUR out of five companies now report a big gap in their talent pipeline, and 40 per cent of the companies believe this to be an acute problem, a recent study has found.
A range of factors are driving this gap, including low fertility rates, speed of change, underinvestment in education and an ageing workforce.
The study, which took in almost 200 firms globally, also found that only 14 per cent of organisations are prepared for the potential loss of skills, corporate knowledge and leadership that will occur within the next five years.
Furthermore, prepared firms are much more likely (42 per cent compared to just 8 per cent of underprepared firms) to conduct formal workforce planning processes integrated with strategic business planning.
While industry thought-leaders have long recommended that firms focus workforce planning efforts on critical job roles, results indicate that prepared organisations conduct planning for all job roles, a finding with significant implications for human capital resource allocation.
Organisations with integrated workforce planning processes can realise significant benefits, such as identifying early-warning signs of human capital risks, implementing more targeted recruitment strategies, and improving the allocation of finite HR resources, said Anastasia Ellerby, managing director of Infohrm, which conducted the study.
However, she said there was a range of potential roadblocks to achieving success, especially the absence of senior and line management commitment and a shortage of analytical skills within HR.
Over the coming years, Ellerby said many of the trends identified in the study would continue, including skills shortages influenced by the ageing workforce and significant new technological developments.
She also pointed to other trends, including potential organisational culture issues caused by generational differences, and increase in the size of the contingent workforce – a group which most organisations exclude from their workforce planning activity, and an increasingly global workforce, highlighting the need for HR to both attract (from overseas) and retain (local) skilled workers.
“All these trends highlight the need for HR practitioners to hone their skills in strategic integration of business/HR planning, sophisticated human capital data analysis, influencing skills and the ability to innovate in response to emerging priorities,” Ellerby said.
There were a number of steps HR practitioners could take. She recommended preparing a business case to resource a professional workforce planning capability. “One way of doing this would be to prepare a ‘dummy’ demand/supply/gap forecast to highlight potential costs and lost opportunities caused by future skills shortages.”
Ellerby also said to ensure workforce planning processes are integrated with both strategic businesses planning and other people management planning.
“Review your planning horizon: is it sufficiently long-term? Also, appreciate that workforce planning is an iterative and incremental process,” she said.
“Work towards deployment of a comprehensive range of workforce planning processes, from well-researched environmental scanning through to review of strategies.”
She also said uncertainty could be reduced by improving future-friendly skills such as strategic thinking and scenario planning.