Joining the dots: Proactive workforce management

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Your workforce is an asset – but do you have a strategy for your investment? Marc Havercroft investigates.

The core challenge for workforce management has always been finding, hiring, and keeping the right people for the job. Businesses have traditionally approached this mandate in a reactive manner, only seeking out talent when a pressing need emerges. Often, this occurs without a clear understanding of what sort of talent they’re seeking, where to find it, and what factors contribute to its ongoing motivation. With labour markets growing increasingly complex and competitive, this sort of ad hoc methodology can end up being a costly drain on the organisation’s current and future resources.

We need to start approaching HR issues proactively if we want to benefit from a smarter workforce. A proactive HR methodology focuses on building up workforce engagement at all three main stages of the talent management process: acquisition, learning, and retention. Moreover, it treats the workforce as a critical asset in itself, instead of an artificial agglomeration of different departments and units within the business.

Businesses are in a prime position to drive end-to-end engagement by leveraging the growing volume and granularity of workforce data in the market. However, the main priority for HR professionals should be to develop comprehensive workforce strategies which align with their organisations’ overarching commercial plans. Doing so will dramatically boost their success in not only engaging the right talent, but delivering it to where (and when) the business needs it most.

Sticking to the plan

The first and foremost step in building a smarter workforce is to make sure your organisation has a forward-thinking strategy. It sounds simple, but workforce strategy can often be overlooked by executives in favour of a focus on other areas like sales, marketing, and product innovation. All of which are crucial to business success, of course – but also reliant on the organisation’s workforce to meet those goals. According to IBM’s 2012 CEO Study, 77% of Australia and New Zealand CEOs see human capital as a key source of sustained economic value in their organisations – the highest of any one source.

In other words, workforce strategy must underpin broader business plans. HR leaders need to use their executive positioning to map their strategy to current and future commercial activity. Otherwise, businesses will find their broader plans hampered by an inability to support them with the right talent at the right place and time. Refocusing the business on a new product innovation will demand rapid up-skilling and learning amongst existing employees, which in turn may necessitate new hires to bring in that additional expertise.

With a comprehensive workforce strategy mapped to overarching business plans, HR managers can proactively prepare for changes to their workforce, instead of being wrong-footed by demand from other parts of the business. Organisational data and predictive analytics can provide in-depth understanding the business’ current and future situations. It can also assist in identifying gaps in the business, as well as potential solutions to those gaps, such as addressing skills shortages by identifying where those skills exist in other parts of the organisation.

One example: A well-mapped workforce strategy was crucial to General Motors’ turnaround in the immediate aftermath of the Global Financial Crisis. The automaker’s decision to focus on new clean-fuel technologies in its cars was complemented by significant investment in learning and talent development around the necessary new manufacturing and technical processes. Working with IBM, General Motors ensured its workforce was capable and engaged with the company’s broader vision, resulting in a rapid and ongoing rebound in profits and employee retention alike.

Internal affairs

Once the business has a clear workforce strategy, it can go about building the internal capabilities needed to deliver on the strategy’s outcomes. The rationale for these new units and structures should be firmly grounded in how they contribute to overarching business goals. The actions which they take – whether in acquisition, learning or retention – should be entirely informed by the broader workforce strategy and how it ties back into the success of the business.

Different internal structures will go about their work in different ways. Some may focus on improving the productivity of their talent, while others may be tasked with building more geographic and seasonal flexibility into workforce deployment. However, each internal structure should provide capabilities to engage talent at all stages of their time in the business – from first-contact and acquisition to training to career progression. IBM’s 2012 CEO Study found ethics (77%), collaboration (70%) and mission (70%) are the key foci of Australian and New Zealand CEOs in engaging employees – all of which must resonate with the workforce’s own values in order for success.

Workforce managers in all three areas can improve these levels of engagement by using employee data as a vast consolidated resource. Employee histories, productivity analytics, and professional networking tools all provide valuable sources of data which can be aggregated to better inform hiring and training decisions. However, data alone is not enough for a smarter workforce: HR professionals must use it to ensure employees are getting the training, opportunities, and culture which will help them reach their full potential.

One example: ANZ Bank’s learning unit (supplied by IBM) now extends across the entire Asia-Pacific region to ensure consistent customer service in every branch of every country. This learning unit supports ANZ’s broader goal of building a super-regional infrastructure for easier, faster banking throughout Asia – a case of workforce strategy supporting the business plan. It also gives employees access to regular updates in their technical and service skills, along with expanded opportunities for career mobility and advancement throughout the bank’s Asia-Pacific locations.

Why am I here?

As mentioned before, engagement is critical to maximising workforce potential to meet business goals. It’s also critical to the sustainability of workforce investment. A high attrition rate can multiply the costs of new hires up to tenfold; losing employees only six months after acquisition not only affects core business performance, but can also reduce the organisation’s willingness to make future talent acquisitions.

This calls for a two-fold approach to workforce management: aim for high retention by building a strong internal culture; and start leveraging other workforce assets like project-based contractors and freelancers. While retention is obviously where this approach is most needed, it also has implications for acquisition and training/learning, particularly when factoring in new workforce elements like growing volumes of contingent labour. Most of all, workforce managers need to listen to their employees’ needs, ambitions and values to make sure their talent is worth the investment.

The growing degree of communication and synthesis between different data systems means HR managers can compile far more accurate employee histories and records than ever before. Data can reveal what sort of working arrangements will best suit your talent, and how to best leverage their unique combination of skills and motivations.

One example: American Airlines uses employee data to drive its retention and cultural policies at all points of the business. As part of an end-to-end IBM workforce solution, the airline has managed to boost retention in an industry well-known for its low margins and high competition for specialised talent like pilots and flight planners.

Right place, right time

A smarter workforce only becomes possible when businesses treat their workforce as an asset. Doing so inevitably leads to more proactive HR strategy, which seeks to maximise that asset’s value in relation to broader commercial goals. It allows businesses to identify what talent they require and deploy it where and when it’s needed, rather than scrambling to keep up with other divisions’ tactics. And it leads to greater engagement with, and retention of, the talent underpinning the business. A smarter workforce benefits the employee, the business unit, and the entire organisation; used strategically, it can ensure longevity in any economic situation.

 

About the author

Marc Havercroft is Leader HRO Strategy and Solutions, IBM Growth Markets

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