WHAT IT'S ALL ABOUT...
Planning for 2020?
Workforce planning is concerned with putting the right people in place at the right time, ultimately to equip organisations to meet their long-term goals.
But what happens when your plans for the future are overtaken by more immediate concerns? Contrary to what you might think, a sudden shock accompanied by uncertainty does not make workforce planning redundant. In fact, by allowing you to accurately assess the staffing implications of rapidly unfolding events, workforce planning actually becomes more valuable than ever.
Workforce planning and business resilience
Amid all the talk of “unprecedented times”, it’s easy to lose perspective. This isn’t the first time businesses have been hit by a crisis, or by the need to suddenly rethink their staffing strategies.
As reported by HBR, researchers studied 4,700 listed companies to see how they fared during the major recessions of 1980, 1990 and 2000. 17% of these went bankrupt, went private or were acquired. At the other end of the scale, 9% of companies flourished.
This wasn’t just luck. The companies that stagnated tended to be those that merely “switched to survival mode”, making deep cuts and reacting defensively. High performers, by contrast, tended to take a different approach. They had the ability to think through alternative scenarios and make contingency plans. Flexibility combined with a readiness to adjust tends to be key to survival.
Workforce planning forms a vital part of this approach. With it, you can actively re-evaluate your staffing structure in light of rapidly unfolding events. Not least, you can test the impact of proposed changes to your staffing model in terms of financial margins and productivity. All of this can help you make the right decisions on when, where - and how far to act.
Timely action vs knee-jerk reaction
When a crisis hits and retrenchment is called for, the workforce plan is often the first area under discussion.
It can be especially tempting to look for simple, across-the-board workforce changes: ones that can be quickly and easily implemented and that will boost cash flow in the short term. Examples include universal compensation caps or cuts in hours worked. Or it might involve a policy of x number of employee reductions across each department or pay scale.
But the danger here is that the proposed solution is divorced from organisational need. In which case, it could end up doing more damage than the actual problem.
Workforce planning allows you to take a much more nuanced approach. For instance, it may be that the impact of the crisis will vary across different areas of the business. Sales of certain product offerings may have fallen, while demand for others may be higher than ever. On-site consultations may be on-hold, while your call-centre employees are inundated by queries. Across-the-board changes to your workplace strategy are unlikely to be able to address these realities.
Workforce planning can present you with a much wider and more useful range of options to work with. You can model and remodel different structures and test their impact, not just on the balance sheet, but also on productivity. Team mergers, redeployments, possible reconfigurations of pay scales: you can explore all of these and get workable insights on their likely impact.
The end result should be adaptations that balance the need to ease cash flow, while preserving the organisation’s ability to meet its operational requirements. In other words, you can still make significant changes - but you are more likely to be making them in the right areas.
In anticipation of a rapid rebound in market demand, if we maintain the staffing budget at its current level, at what point will the impact on cash flow become critical?
We have recently received a large order for the provision of an essential service. How will various models for overtime/additional recruitment impact cash flow?
Workforce planning that actually works
What makes this crisis different to the ones that preceded it? Lots of things, obviously. But what we’re concerned with is the technology available to organisations.
Think back to the 2000 dot-com bubble and the businesses impacted by it. Back then, the ability to integrate data from across an entire organisation and to create workable workforce planning models was really only the preserve of a handful of enterprises.
Now fast forward to the 2008 downturn. By this time, the ability to model and analyse data using the likes of Excel had increased. Takeup of dedicated planning software had also started to rise - but it was still a niche area.
Now think about the present. Armed with solutions such as IBM Planning Analytics, it has never been easier for organisations to access world-class workforce planning capabilities. This includes the ability to rapidly draw up models for temporary or permanent staffing restructuring, to test their likely impact and make changes in the right areas.
In short, the ability to respond to change has been democratised. The organisations that take advantage of this and adopt the right technologies will be better placed to weather the storms ahead.
Ready to update your organisation’s workforce planning capabilities? Speak to MHR Analytics today.
TM1 Planning Consultant
Experienced analytics consultant