1 Way to Rise Above the Talent Shortage

Most leaders think talent is the most important business resource. Yet, a growing number of leaders lack confidence in having a workforce that can deliver against current and future business goals. Talent scarcity is forcing CEOs to reconsider growth priorities. The importance of human capital planning needs to be elevated to equal the emphasis placed on products and services. Leaders that apply strategic workforce planning can deliver better results in the new normal.

Understanding the Talent Shortage

Globally businesses are lacking the skilled employees needed to deliver on business strategies. This was predicted by Rainer Strack back in his 2014 TedTalk using labor supply and workforce demand forecasting.

In 2018 Korn Ferry predicted that by 2030 there would be a global talent shortage of more than 85 million people. A more granular look at their research indicates that the talent shortage will impact countries and industries differently. For example, the financial services industry in the US will be affected the most due to lack of talent, with $435.69 billion in projected unrealized output.

In line with these reports, ManpowerGroup's 2021 global survey of companies validated the crisis. Seven in ten companies reported talent shortages and facing significant challenges hiring (see image below).

There is a growing trend in the US that people are unable or unwilling to work. According to the US Bureau of Labor Statistics, the labor participation rate will decline to 60.4% for people 16 and older in 2030.

Beyond looking for answers in new technologies, leaders can rise above the talent shortage by applying the tools and practices of strategic workforce planning.

Strategic Workforce Planning

In addition to the obvious need for companies to attract, retain, and develop great talent, leaders need to proactively anticipate current and future talent needs. Today's evolving talent shortage amplifies the gaps of organizations that have relied on an "if you build it, they will come" workforce plan.

It is time for leaders to get serious about strategic workforce planning.

Strategic workforce planning is different from operational demand planning in that it addresses both the organization's current and future strategic needs. The goals of strategic workforce planning are to:

• produce a workforce with the right skills, able to meet the changing realities in the talent market and shifting needs of the business in a cost-efficient manner.

• avoid being surprised by a changing talent marketplace.

• detect and prepare for mixed future realities in the crisis-driven business environment.

Getting Started with Strategic Workforce Planning

There is no "one- size fits all" approach to strategic workforce planning. The best approaches account for the unique context and culture of your business.

It all begins with getting clear on your strategic business priorities. Then you are ready to integrate the following fundamental strategic workforce planning steps into your planning process:

• Role segmentation. Identify strategic roles based on their importance to the execution of the business strategy. As a general guide, identify the roles that contribute the most value to the strategy. These roles would account for no more than 15% of the organization. Succession planning tools like the 9-box can be altered and used to segment roles based on value and potential.

• Environmental scanning. Conduct quantitative and qualitative analysis of the internal and external workforce supply and demand. Advanced talent data analytics and tools like TalentNeuron can make this step more manageable and more robust by tapping into global talent, location, and competitive insights.

• Scenario planning. Consider a range of potential futures to improve the possibilities of future success in your business. Possible future scenarios might include unionization, competitive threats, availability of talent, or economic recovery impact on the workforce. The goal is not to predict the future but prepare for likely possibilities. The field of strategic foresight provides answers for how leaders can become future smart.

Once you have completed the steps above, you are ready to conduct a gap analysis and begin action planning. The final step is to monitor and report on your plan to keep it dynamic to the changes in the talent marketplace and your shifting business strategies.

It is always good to have a plan, and the best strategies are the ones created and worked out in implementation. Strategic workforce planning is not an exact science. Companies can benefit from partnering with an organizational development consultant to save significant time and avoid frustration from strategic workforce planning projects.

Key summary points

• Today's leaders lack confidence in having a workforce that can deliver against current and future business goals.

• Seven in ten companies reported talent shortages and facing significant challenges hiring.

• In addition to the obvious need for companies to attract, retain, and develop great talent, leaders need to proactively anticipate current and future talent needs.

• Strategic workforce planning is a dynamic process to ensure a business has the correct number of people with the right skills in the right places at the right time to deliver on current and future goals.

• Role segmentation, environmental scanning, and scenario planning are fundamental steps to strategic workforce planning.

Let's talk today about how we can help you achieve your goals with transformational executive coaching and organizational consulting solutions that work.

References

Mayo, A. (2015). Strategic workforce planning – a vital business activity. Strategic HR Review, 14(5), 174-181.

Momin, W. Y. M., & Mishra, K. (2015). HR analytics as a strategic workforce planning. International Journal of Applied Research, 1(4), 258-260.

Willis, G., Cave, S., & Kunc, M. (2018). Strategic workforce planning in healthcare: A multi-methodology approach. European Journal of Operational Research, 267(1), 250-263.