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Beat the Competition With a Rapid Talent Allocation Plan
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Rapid talent allocation could be HR’s ticket to the proverbial “seat at the table.” According to a recent McKinsey & Company survey, being fast or very fast at moving talent among strategic projects is linked most closely with talent management effectiveness. Organizations with effective talent management programs, the survey reveals, have a better chance than other companies of outperforming competitors.
But strategic rapid talent allocation is not an easy feat. Managing the flow of people to new projects requires an in-depth understanding of roles and evolving skills requirements. There is even more complexity involved when supplementing this movement with new hires and contingent workers who all need to be sourced, on-boarded, and productive at just the right time.
Yes, managing talent supply is a complicated endeavor, and HR is in the best position to understand the many curveballs it entails.
However, at most organizations, the process that supports this (headcount planning) is not driven by HR. It is precipitated by the annual budget cycle, when finance provides the cost and headcount limits for each department. Finance passes the budget to HR, and HR executes the plan.
The problem here is that this traditional approach does not take into consideration important details about team formation, turnover trends, or projected employee movement. At the end of the day, the budget provided by finance does not define the impact on teams and the roles that need to be planned for and managed as strategic priorities rise and fall.
But trouble is often an opportunity in disguise. With the right approach, HR leaders can play a more strategic role in the rapid formation of teams, helping shape the overall business. By transforming the headcount planning process with specific agile workforce planning practices, HR can create a bigger impact with effective talent management.
If you are an HR leader who is looking to build flexible teams and gain more visibility with C-suite leaders in a fast-paced business environment, here are three agile workforce planning practices that you can incorporate into your overall approach:
Even the best laid workforce plans can go awry: A digital competitor may emerge partway through the fiscal year, driving new project requirements, or it can take longer than expected to land critical talent.
But this does not mean that long-term planning is a futile process.
Here’s why: Those HR leaders who plan for the future, but have regular workforce planning conversations with the business and finance, are in a better position to think strategically while responding with agility. They can see how well they are performing against the big-picture vision and if there are major gaps they need to address.
These check-ins could be monthly or quarterly, but the important thing is that they happen at a frequency that gives HR leaders an understanding of how well they are executing on the plan and can hold themselves accountable.
One financial services organization with 50,000 employees, for example, uses a monthly planning process to capture workforce demand for the different groups within the organization. If hiring isn’t progressing as fast as necessary, the HR team talks to recruiting; if the plan over budget, they discuss it with Finance. This way, the organization can more closely align talent supply with business growth.
Continuous activity is the key to actionable workforce plans. On a regular basis, analyze the variances between headcount supply and demand. Also review exit, movement, and hiring assumptions, and then update the action plan. With an awareness of where deviations may be happening, you can hire based on genuine need, and respond more quickly to shifts, while looking ahead more accurately.
Talent demand is typically managed as the number of heads that are required to deliver the business plan. But when the focus is on headcount costs, and not just headcount, HR has more flexibility. For example, if a senior person leaves, and her role has evolved into a more repeatable process, HR can consider replacing the individual with two junior people who may be twice as productive. Most organizations with a headcount-driven process, on the other hand, would immediately replace the employee with someone who has a similar level of experience.
Focusing on costs can help HR contribute to a healthy bottom line: One of our professional services customers found that, by exploring how salary costs will rise as employees receive pay increases over projects that span multiple years, they can assign the right mix of junior and senior staff and improve margins by $1 to $3 million per contract.
Being cost-focused means knowing the budget and your Total Cost of Workforce (TCOW). This is the full cost for people who contribute work to the organization, including all of the labor costs (contingent and permanent) and the workforce overhead costs. Knowing this will help you determine what changes will mean to the last cent — a key consideration of cost-conscious executives.
Betting big on one future carries a certain amount of risk. Conducting a major hiring spree, for example, to ramp up for a customer project that ends up falling through can lead to unsustainable cost overruns.
But when HR teams can gather all the relevant workforce data and model multiple what-if scenarios — each with different talent supply, cost, and business requirement assumptions — they can develop contingency plans and respond more rapidly when situations crop up.
This information, however, is often spread across the organization in siloed systems within various departments and is difficult to aggregate, which makes it difficult to create multiple plans. Look for technology and tools that enable you to create and compare different workforce planning scenarios so that you can explore multiple futures at the same time.
The demands of unpredictable markets are trickling down into ever-changing business priorities and talent supply requirements. This makes rapid talent allocation a high priority for businesses.
Those HR leaders who make planning a continuous, cost and future-focused activity are in the best position to get ahead of the curve. This gives HR leaders the capacity and discipline to think well ahead, so that they can react more quickly and effectively in the moment. In other words, agile workforce planning is a way for HR to “seize the day” — while future-proofing the business at the same time.
This article originally published on the Visier blog.