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STRATEGIC WORKFORCE PLANNINGMANAGING IN AN AGE OF UNCERTAINTY
Julia Howes, Principal, London Maude Julien, Senior Associate, [email protected], @juliahowes1 [email protected]
MERCER
In the Public SectorA Workforce Tsunami Is Approaching
1
DISPARATEPROFESSIONAL
GROUPS
CHANGING SIZEAND SHAPE OF
THE WORKFORCECOMMISSIONING
ANDOUTSOURCING
SERVICES
AGEING WORKFORCEAND CHANGINGDEMOGRAPHICS
POLITICAL STABILITY, BUDGET CUTS AND COUNCIL TAX FREEZES
THEOVERWHELMED
EMPLOYEE
BACK OFFICEREFORM AND
SHAREDSERVICES
MERCER
A systematic, disciplined process for identifying andaddressing gaps between current and projected futureworkforce requirements.
It provides a rational business basis for prioritising,developing, and funding the people practices to supportbusiness objectives
RightLocation
RightPeople
RightTime
What is Strategic Workforce Planning?
RightCost
2
RightShape
MERCER 3
Maturity of Workforce Planning
Budget-driven headcount planning
• Lack consistent methodology for workforceanalysis
• Lack the technology tools to improveproductivity + save time
• People strategy and business strategy aligned• Use technology to leverage data +
drive business results
• Identify critical workforce segments +gaps + “what-if” future scenarios
• Employ workforce strategies to close gaps
• Manage workforce like an asset• Create Analytics and Planning Center of Expertise
FOUNDATIONAL WORKFORCE PLANNING�STRATEGIC WORKFORCE PLANNING~
Impa
ct:
Bus
ines
sPe
rfor
man
ce
Operational Strategic
Budget-driven headcount planning
Workforceanalytics/dashboard
Strategicworkforce planning
Humancapital planning
Level 4
Level 3
Level 2
Level 1
MERCER
Strategic Workforce Planning
4
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Advantages Of Addressing Workforce GapsEarly
5
Buy Build Borrow Bind
Transform Regroup
MERCER
Public Utilities Org Case Study
6
Under 25 25 - 29 30 - 34 35 - 39 40 - 44 45 - 49 50 - 54 55 - 59 60 - 65 66 and over
Ageing Workforce
Less than 1 year 1 to 3 years 3 to 5 years 5 to 10 years 10 to 15 years 15 to 20 years 20 to 25 years 25 years or more
Tenured Workforce
MERCER
Public Utilities Org Case StudyWorkforce Map
7
“We havedone
buying,now needto build”
“We cando more
aboutbuilding
levels5/6”
MERCER
“Don’tunderstandcapabilities
acrossUtilities Co”
“People want toknow their
career path”
Public Utilities Org Case StudyWorkforce Map
Careers need to be positioned as a “climbing wall” where people move around theorganisation to explore new opportunities, not a “ladder” that people move up.
“Don’t look atsuccession options
when we look torecruit”
Challenges
“Previously hadcommitment to
successionplanning”
“Need philosophy of developing our people”“Provide interesting and challenging work”
“Define technical career paths and opportunitiesfor progress”
“Look at how people can move laterally”“Recognise employee’s contribution to the
organisation’s success”“Ingrain clear line of sight to strategy”“People learn best on the job – what
opportunities exist to move?”“Look at people coming in and out of panels as
potential candidates”
Opportunities
“Tend topromote
specialists intopeople
managementroles… not best
fit”
“Technicalcapabilitiesonly go so
far”
“Sometimesbackfilling is tooshort a time forpeople to do the
full job”
“Needphilosophy ofdeveloping
people”
8
MERCER
Role 1 Role 2
Role 3 Role 4
Public Utilities Org Case Study
914 December 2015
Year 0 Headcount To Year 1 To Year 2 To Year 3Year 0 Headcount To Year 1 To Year 2 To Year 3
Year 0 Headcount To Year 1 To Year 2 To Year 3 Year 0 Headcount To Year 1 To Year 2 To Year 3
Supply Demand (1) Demand (2)
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Public Utilities Org Case StudyCritical Workforce Capabilities
Capability Area FutureImportance
ActualProficiency
DesiredProficiency
ChangeMagnitude*
Customer Focus 5 2 4 10.0
Project / Programme Management 5 3 5 10.0
Collaboration 4.5 3 5 9.0
Safety Culture 5 4 5 5.0
Leadership & Self -Management 4 3 4 4.0
Achieves Results 5 4 4 0.0
10
MERCER
Public Utilities Org Case Study
1114 December 2015
521
41133
8646
611
4
- 20 40 60 80 100 120 140
# of employees by salary grade in 2014 Contractor spend $M
127.6
159.8
86.497.7
020406080
100120140160180
2011 2012 2013 2014 (f)
Proposed # of employees by salary grade
127.6
159.8
86.4
41.2
020406080
100120140160180
2011 2012 2013 2014 (f)5
21
49157
10254
713
5
- 50.00 100.00 150.00 200.00
Proposed contractor spend $MTotal employee costs = 167M Total cost of labour for 2014 = 265M
Total employee costs = 198M Total cost of labour for 2014 = 239M
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Total Cost of Employment = 2.39M Total Cost of Employment = 1.95M
7%
26%
22%
44%
0% 10% 20% 30% 40% 50%
< $50k
$50k-$75k
$75k-$100k
$100k-$150k
Operations- ( Current Breakdown by Salary, Level 5 ) -
15%
30%
30%
25%
0% 10% 20% 30% 40%
< $50k
$50k-$75k
$75k-$100k
$100k-$150k
Operations- ( Illustrative Breakdown by Salary, Level 5 ) -
• Realign workforce composition (i.e., more ‘junior’ level 5) so more senior staff don’t ‘dip down’
• Productivity improvements due to improved project management and partnership management capability reduce headcountby 10%
Rebalancing the workforce composition may help to increase productivity and realignworkloads based on seniority…
Public Utilities Org Case Study
12
MERCER
Public Utilities Org Case Study
13
Say: Importance of EVP Elements
Employees Preferences
Can
dida
tes
Pre
fere
nces Pay
Bonus
Colleagues
Careeropportunities
Workspace
Supervisor
CASH BENEFITS
CAREERWORKPLACE
PRIDE/AFFINITY/PURPOSE
CUTURAL ALIGNMENT
CASH BENEFITS
CAREER WORKPLACE
PRIDE/AFFINITY/PURPOSE
WORKFORCE PLANS
BUSINESS VISION
CONTRACTUAL
EMOTIONAL
COMPETITIVE
DIFFERENTIATED
UNIQUE
PSYCHOLOGICAL
New Employee Value Proposition
Do: What Drives Employee Retention
0.0% 2.5% 5.0% 7.5% 10.0%
If promoted during last year
If incentives received
Supervisor didn't leave last year
10% reduction in layoffs
10% base pay growth
1-point rise is unemployment
10% market pay adjustment
Percentage point reduction in turnover
Important forcurrent and
futureemployees
The supervisorhas a greater
impact than payincrease on
retention
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Public Utilities Org Case StudySummary of Workforce Priorities
Restructure / redefine work processes to ensure that work is being done by theright person at the right level to support growth, and increase productivity
1
Align contractor process with the workforce to get a better understanding of thetotal cost of the workshop and what it the optimal outsourcing mix to achieveflexibility and innovation, but minimise costs.
2
Articulate desired culture and develop supporting Employee Value Proposition thatengages the workforce and aligns with the organisation more broadly
4
Define career paths and supporting development opportunities to improveability to ‘build‘ talent internally
3
14
MERCER
Mercer’s Top Tips
TOP 10 TIPS FOR STRATEGIC WORKFORCE PLANNING 15© MERCER ANALYTICS WORKSHOPS
Have a clear but flexible methodology
The workforce plan is owned by the business, but the process is driven by HR
Focus on your critical workforce segments
Plan for more than one outcome
Find the right people (and skills) to support the process
Your workforce plan should tell a story
Workforce planning is not an “event”
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