Sunday, November 22, 2009

Those employing Workforce Modeling tools should be good “onion-peelers”

While flexible workforce modeling tools and forward-thinking modeling frameworks are major determinants of whether an organization crashes, copes or creates business value during significant workforce re-alignment events, don’t underestimate the importance of “peeling the onion” before converting modeling outcomes into decisive actions.

Case in-point from the world of HCM-BI (Human Capital Management-Business Intelligence):

- An organization determines their turnover is lower than their competitors – good news.

- Same organization looks further and determines their turnover is lower, but they are losing more people to their direct competitors than their competitors are losing to them --not good news.

- Peeling the onion further … it is determined that very few of those employees leaving for direct competitors are determined to be upper quartile performers --- back to good news.

Workforce re-alignments, consolidations and other transition scenarios are ripe for flexible HR solutions offering “what-if” modeling capabilities. Optimize execution during these critical exercises and generally ensure the future health and success of the business.

Modeling examples from the world of M&A include making informed decisions about who to keep when there’s a workforce redundancy (e.g., consider multiple data points including relative value in the context of the new business), determining the best retention, incentive and engagement hooks for different classes of key employees, balancing cost savings from possibly accelerating the timing of terminations with the need to avoid escalating business risks (e.g., unsatisfactory customer service or product quality).

Another re-alignment scenario that will be more prevalent over the next few years is “baby boomer exit planning and associated risk mitigation” … where the same core issue will be on the table as in most other workforce re-alignment situations, namely, determining whether it’s best to address key skill/competency gaps through training, re-deploying, hiring a regular employee, hiring a contractor, or doing nothing.

Peeling the onion further on game-changing workforce planning and modeling scenarios reveals other key nuances that should be considered:

- Understanding the impact of factors such as management style, work schedules, team-based vs. individual work models, and formal vs. informal work environments on employee productivity, engagement and retention

- Predicting which employee's performance would be most adversely impacted by uncertainty and extensive organizational change ... perhaps even formalizing “copes well with uncertainty and change” as a foundational competency for the business

- Including “Y” factors (i.e., motivation, attitude and personality) when evaluating internal/external candidates for positions … “Y” factors are now considered by many to be as important as the existence of certain skills or competencies

- The dimension of “latent competencies” … when workforce capabilities exist but are not obvious or being leveraged by the organization, since they are not relevant to performing within assigned positions / roles ... another reason to track competencies at BOTH the person and position level!

- The modeling of “cascading gaps” caused by re-deploying internal employees to address workforce gaps

- Including the cost of downtime when modeling the cost of training vs. other options to address a workforce / competency gap

- Including the cost of hiring manager time in screening, selection and/or training activities to address workforce / competency gaps