Is Workforce Planning . . . Old News? Is HR changing fast enough to keep up?
(As previouosly published on SkilledUp.com)
If you ask executives or line managers what the role of Human Resources (HR) in their company you will likely receive the politically correct response like this one from Goggle search.
“The mission of Human Resources is to maintain a fair, equitable, and positive work environment for all employees, in support of the mission of the organization. It is based upon the belief that the success of any organization, and its ultimate value, is primarily dependent upon its people; and that the development of the greatest potential for each employee will create job satisfaction and career opportunities for individuals and provide maximum benefit to the organization.”
This is a 1970’s mission statement for HR. Surveys like this one from CareerBliss.com show most workers generally do not trust HR to represent their best interest nor correctly help them plan a career path in the current workload environment. Even prior to the 2007 beginning of the recession there was a growing feeling that HR would bow to executive or owner instructions rather than listen to worker complaint, ideas or career planning as if HR were a labor relations negotiator. Since 1993, DDI has tracked trust and trust behaviors in the workplace; but, for the most part, decisions about the workforce were related to cost, benefits, and performance – strictly bottom line decisions. Investing in your workforce was not considered an investment, but an expense. Workforce planning was more about recruiting and retention. HR leaders aren’t very good in either performance statistics or presenting the translation of the data to a low performing worker. For some they see HR as another tool to reduce staff. They are right, but it is also meant to put the best talent to work on what they do best.
Underlying factors which contribute to HR overload and lack of statically competency in workforce planning:
When new compliance rules from the Affordable Healthcare Act (AHA) kicks in for business, most believe companies will dump their employees into the open health coverage market offered by Obamacare thus driving up employee cost and lowering access to healthcare. This lack of wisdom may be cost effective, but will workers see the decision as another lack of trust and seek out other opportunities? So what will HR do about it, and how will it impact workforce planning? That depends on the management philosophy toward valued talent, or as has become popular to label your core workforce, Human Capital, or a commoditized service. A term most perceive with distain.
The reality is HR will be so overwhelmed with compliance and evolving work rules it has little time to consider how changes in how “work” is being accomplished and its impact on workforce planning, competition or globalization issues. Contingent (not to imply a fulltime job is at the end of the temp rainbow) staffing agencies have grown nearly 300% since 2000. There are more than 60 online staffing matching platforms with mergers, partnering and acquisitions like a revolving door as investors see the staffing industry generated approximately $122 billion in sales in 2013: $109.2 billion from temporary and contract staffing and $13.1 billion in search and permanent placement services. Temporary positions represent 25% to 30% of the total US workforce as employers resist risks of fulltime hiring in a still tepid economy. Over the next decade that number non-employee workers is expected to increase to near 50% of the workforce.
Another contributing factor is most think cutting headcount and smarter use of technology to replace repetitive tasks was directly related to the recession. Not true. Technology advances and innovation have been an expanding trend for decades. Advances in data storage, virtualization, and analytics have exploded. At the same time, ten million baby boomers have already left fulltime employment with 60 million more by 2030. With those eligible for retirement benefits increasing to 10,000+ per day, lots of experience will be drained from employers. Those employers are still struggling to learn what intellectual knowledge they will lose from this cohort, much less planning how to replace them or grow their business to be a global competitor.
The Independent Workforce
A recent survey done for MBO Partners, a back office support operation for some 55,000 independent professionals, showed 33% of the 17.7 million independents US workforce are over 55, or baby boomers, and 77% from the overall survey said they would chose to remain independent.
Source: MBO Partners survey 2013 by an independent research firm.
With some few exceptions, it is my experience that survey responses of executives considering analysis of “work” and how it may be effectively accomplished is both vague and skewed to company beliefs that may be outdated. Mostly this is due to HR and IT not keeping up with the magnitude of sweeping changes in technology virtualization, Big Data, Analytics, social media, worker mobility and increased connectivity to a handheld device almost anywhere and at any hour.
The issue at hand is simple math. Because of a lower birth rate, lower GPA for both high school students and college graduates without having had business readiness for the future we have lost our intellectual edge as a nation. This creates a gap of needed talent of about 25 to 30 million in the US for more than a decade. If you can’t keep key roles filled, trained and retained; how do you expect to do real workforce planning if you are constantly putting out operation fires?
Some see increasing the H-1B temporary visas issued as part or all of the solution. Doing so would attract more Science, Technology, Electrical and Math or STEM majors, but it also adds more risk to our society from potential terrorist attacks in our open society. Some say keep the most valuable baby boomers on the job longer. Those who want to stay and have the talent have already made that decision, but the freelance open market is looking much more attractive to those who want fewer hours and more flexibility watch how those markets grow.
Use a Different Prism to See Your Workforce
The illustration below is the objective of most business and for some the only way they are able to become global. For established businesses it is a heavy, and expensive, lift to make; but still necessary to compete. It’s NOT workforce planning if the model doesn’t change and leaders choose to “kick the can down the road.” Fix it, build it, outsource it or be left behind.
Source: McKinsey Global Economy Report 2012
Source: Aberdeen Research “Data Storage and Information Trends 2013”
We like to think we grasp the speed of change in a digital world and the ramifications which will affect our workforce, but do we? Do your HR staff and IT departments see the stamped of new platforms and applications that can help decision makers make better decisions? Most enterprise leaders will need to compete on a global scale state, “I need accurate analysis of the skills on each level and the impact of my choices to be proactive, not reactive before I make people decisions and talent assignments.”
The baseline for understanding how our workforce will change and how we will need to change with it begins by doing the math on your generational workforce. The composition and how it will change when baby boomers leave is important data. Figuring out how to best pry the knowledge in the heads of boomers is another challenge. Then understanding how leadership will have to change to build or rebuild trust among the various types of workers brought through in to work with your core teams to bridge the work skills gap charted below.
Source: Compiled data by SP3M Group LLC
Bridging the Skills Gap by Generations
The chart above illustrates the magnitude of workforce planning – excluding secondary education requirements. Leaders must build trust and give more latitude to workers and temp team members working with three or four generations and a mix of culture and beliefs. This is why the options of workforce planning are complex and exasperating to execute.
Think in terms of a pro team coach or orchestra director or movie director bringing together various talents and skills to accomplish a goal or objective. The next set of players can change based on the circumstances or situation.
Cisco, who regularly tracks trends in workforce capabilities using technologies to plan network growth, released a data trend that is astonishing to most. By 2020, there will be 50 billion connected devices or seven times more than the number of people on the planet.
Accenture has assessed how college graduates have fared in their quest for an entry level job after graduation the past three years. The findings dispute the value of talent and the process of developing talent. Unless you are an exact match of skills, knowledge, credentials and personality you will not be considered for the 3.7 to 3.9 million open to fill positions which has remained consistent since 2008, according to the US Chamber of Commerce and Bureau of Labor Statistics.
Now supposedly technology vendors (Managed Service Providers, MSP, Vendor Management Systems, VMS, Learning or Talent Management Systems, LMD, TMS, Performance Management systems, PMS, etc.) have tackled the issue, put it in the “Cloud” as a SaaS. The problem is no two companies operate the same; no two SaaS platforms are built the same. Also, the race to acquire and merger has been at pitch fever for the past year, each attempting to provide a “plug and play” solution for a holistic look at the workforce. The issue is “the workforce” can be scattered around the world working virtually on a 24 clock. The workforce could be any combination of full time employees, staffing from contingent firms, freelancers with specific skills, independent consultants, in-home CSR services, technical match up with any of the on-line staffing firms. This mix can change almost overnight if one knows what talent they need, when and where needed and the specification required from the temp worker. This is the blended workforce. Trying to manage this revolving door of talent will take more than tacit statistical skills for analysis of the right data at the right time.
Or, like Cincinnati based Proctor and Gamble, which is soon to occupy a 1.8 million-square-feet multi-distribution facility in near Dayton, Ohio, P&G will lease the custom built facility from Prologis and outsource the 800 jobs needed. 600 jobs are to be supplied by Exel, Inc., a supply chain and logistics specialist and about another 200 from Quality Associates, Inc., which specializes in packaging. Not a lot of workforce planning for P&G who has pushed all the HR stuff out the door to these three entities.
Another innovative approach to workforce planning is being developed by Baxter for its new billion dollars, one million-square-feet manufacturing and distribution facility in Covington, Georgia. Georgia Governor Nathan Deal, a former Georgia Congressman, initiated a business ready-to-work program called QuickStart.org. Baxter sees this program as a feeder of biotech manufacturing talent and cooperated with the state to develop a highly technical training curriculum for biotech industries supported by Georgia Tech, Georgia State, University of Georgia, Georgia Southern, and the entire community college system. An Emory U. campus is located in nearby Alcovy, Georgia, and a GA Perimeter Community College is located about a mile from the new Baxter facility.
Baxter is not the first brand name to move to Georgia to avail themselves of this innovate program in workforce training, but will be one of the most sophisticated curriculum providing 1500 locally trained jobs for Baxter There will be some imported bio scientists who know both product and the process. But unlike many technology manufacturing expansions, which go where there used to be excess talent that is now in short supply and very competitively priced, Baxter has invested in a non-traditional local feeder system to supply current and future workforce needs.
Baxter announced in April 2012 that the company is building a state-of-the-art manufacturing facility near Covington, Ga. to support growth of its plasma-based treatments, and there has been much progress on the facility's construction to date. The new plasma fractionation facility will bring Baxter additional capacity for testing, purification, and fill and finish for its biologic medications. The Baxter products that will be manufactured at the Covington facility include immunoglobulin therapy for patients with immune deficiencies and albumin products, which are primarily used as plasma-volume replacement therapy in critical care, trauma and burn patients. Plans call for an integrated campus that will include three main manufacturing components, as well as support components such as warehouse and utilities buildings, administrative facilities and laboratories. The initial phase of development will be approximately one million total gross square feet. The timeline on the project spans several years with commercial production scheduled to begin in 2018.
These are only two of many examples of seeing your industry and workforce through a different prism, not like a paradigm shift, but more like a continuous tsunami of change. The most complex problems in using people resources which require new and computational thinking with most solutions which will only fit your company or some in your industry sector. The solutions needed are certainly more complex and will continue to change to meet market or competition shifts. There are few enterprises qualified to analyze YOUR situation and provide agile scalability and understandable workflow and adapt to technology opportunities as they arise to manage a blended workforce. Which raises the questions, “what is the role of HR and is it capable of leading your leap into a 21st century Gig Economy?” If your workers believe HR is just a mouthpiece for upper management which can’t return an ROI, you have a problem far greater than workforce planning.