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Workforce planning when work and risk keeps changing

Future of Work|Talent|Total Rewards
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By Tracey Malcolm and Hatti Johansson | May 11, 2022

To gain a competitive advantage, manage change and proactively address new risks, organizations are taking a fresh look at workforce planning.

With organizations expecting nearly half of their future workforce to be fully remote or a combination of remote and onsite, strategic workforce planning is critical to plan for new ways of working and uncover risk in the days head.

Given the pressure points that have arisen or intensified in the past three years, how organizations approach workforce planning must change to attract and retain the high-performing talent critical for business success in the current, highly competitive marketplace as well as build a future-proof and resilient organization.

Among the questions employers should be considering:

  • What will the future workforce look like and how do we need to adapt?
  • How and where will work get done? In-person? Remote? Hybrid? What are the risk implications (including professional liability and health and safety) of these new ways of working?
  • How will we implement new technology and data strategies? How do we source the digital talent needed to implement those strategies? Will our organization’s cyber risk profile change?
  • What is our organization’s position on diversity, equity and inclusion (DEI)? How does it affect our ability to attract and retain a diverse workforce?
  • How agile does our organization need to be to respond to ongoing and unexpected change?
  • How do we ensure our current leadership and management teams have the competencies required to plan, execute and communicate new organizational programs, practices and policies?

Now, factor in other considerations like the increasing focus on environmental, social and governance (ESG) initiatives, and it’s no surprise that revisiting and revising workforce planning is a top priority for organizations around the world. Workforce planning is evolving to incorporate work and risk analysis and planning in order “to see around the corner” for workforce and work requirements. In fact, with only 22% of organizations measuring the value of opportunities and the cost of investments and risks when planning for new ways of working, those that are bringing a new approach to workforce planning are gaining a competitive advantage.

Three pillars affecting workforce planning

Far-reaching workplace changes are prompting organizations to rethink their career, Total Rewards and work strategies. There is a 90% increase in the percentage of employers expecting extensive changes in the next three years in “how we define careers at our organization,” according to recent research by WTW. Additionally, there is an 80% increase in the percentage of employers expecting extensive changes in their Total Rewards philosophy, and a 50% increase in the percentage of employers expecting extensive changes in optimizing work and job design. Indeed, as Dominic Cole-Morgan, SVP Total Rewards at Scotiabank, succinctly declared, “What has gotten us here isn’t going to get us ahead in the next year.” 

Pillar 1: Defining careers

Workforce disruptions are compelling organizations to revisit how they define careers. With traditional career paths falling by the wayside, any employer that focuses on narrow skill sets and on-the-job training – if only for upward advancement – will find themselves at a loss as they try to find and keep the best talent. Rather, organizations must embrace a modern view on careers.

Along with determining how to support the individual needs of a diverse workforce, forward-thinking organizations are reconsidering many of the basics about how work gets done. Many organizations do not think their current job architecture (i.e., teams with similar skills such as HR, IT, accounting) and job-leveling (i.e., groups based on titles/responsibilities such as managers, administrators, vice presidents) processes support a flexible and agile workforce.

In response, a recalibration of career frameworks and career growth is underway. High-performing organizations have started providing more flexibility in career options, and many companies plan to reduce spans of control and layers. Coca-Cola is one such company: In recent years (including pre-pandemic), the company tackled its traditional approach to career enablement to become more competitive, progressive and strategic. The company wanted a solution that allowed employees to chart their own career journeys.

Today, Coca-Cola’s employees are encouraged to look beyond traditional paths – whether they’re lateral or dual career paths – and consider uncharted territory. The company’s solution emphasizes development, beyond-the-job training and tools to aid and empower individuals to gain varied and fulfilling career experiences.

R.Scott Matarese, Senior Vice President, Total Rewards, Bristol Myers Squibb, affirms a similar perspective at his company: "Career growth is a key component of our HR strategy, and we are working to reinforce a broader definition beyond just promotions, to include lateral mobility, career development and learning opportunities.” When approached through a skills view, workforce planning can activate new career experiences for employees and ensure skill coverage for organizations. It’s critical to capture the skills in your workforce today (supply side) and to identify the skills required to get work done by work level in your job-leveling framework (demand side). Workforce planning through the lens of work and skills can immediately highlight skill gaps and inform where prioritized development and new career growth opportunities lie, as well as guide decisions about alternative talent models and talent sources. Understanding skill gaps as part of a workforce plan can inform organizational risk such as skill deficits that may impact the speed to which products and services can be developed. Being transparent about where work, skill and career growth converge will keep organizations prepared.

Pillar 2: Reshaping Total Rewards

As businesses move toward restoring stability and learning to function in a new world, addressing how total rewards can support organizational sustainability while also shaping an employee experience that drives success is a must. There will be a greater emphasis on, and appreciation for, transparency and equity in pay, benefits and career.

In addition, employers will continue prioritizing broader wellbeing, recognizing that their role is not only to reward employees, but also equip them with a broader support system that spans emotional, social, financial and physical wellbeing. The pandemic accelerated this trend, and we will continue seeing a greater emphasis on wellbeing as employers embrace a redefined relationship with employees.

Our changing world has shone a bright spotlight on the opportunity for employers to take the employee experience further.

Savvy leaders know that an effective total rewards strategy doesn’t just exist on paper. Our changing world has shone a bright spotlight on the opportunity for employers to take the employee experience further. We predict this will be a key priority for leaders in the coming years as they look to bring new total rewards visions to life. Organizations require insight into how their workforce will change. Engaging the business in plans for entry into new markets, how their footprint may need to change to meet customer demand, and who will get the work done will inform any reset to a total rewards strategy. This connection between workforce planning and Total Rewards was illustrated by a U.S.-based financial technology company that was looking to accelerate the speed to market for its products. To accelerate their plans, they needed to share engineering talent across teams and gave their engineers the choice to participate in new work groups in new cities. As a result, they reshaped their Total Rewards to include value-based pay versus the market and increased wellbeing investments tied to health and social connections. This new approach to Total Rewards became a stronger match for a workforce plan that shifted from job-anchored talent to team networks across the country.

Pillar 3: Optimizing work and job design

When most people think of work, they think of employees performing jobs. But it is more about where, when and how work gets done. With the pandemic where work gets done has shifted. With organizations expecting nearly half (48%) of their workforce to work primarily remotely, or a mix of onsite and remotely, strategic workforce planning is critical to plan for new ways of working and uncover risk in the next three years.

How work gets done has also shifted. Organizations are looking at how to redesign jobs considering new skills, work value and changing employee preferences. By breaking them down to examine the skills and tasks that compose them, leaders can identify how to best accomplish the work using different sources.

Two out of five organizations believe the way they source talent or the jobs they offer/type of work done will be significant factors in how work evolves in the next three years. Organizations are re-examining their definition of a job, the tasks that need to be fulfilled, and how all can be reconstructed into new, optimal combinations balanced among permanent employees, contingent workers and automation/AI. 

With this priority, workforce planning is effectively turned on its head and is far more impactful. By reinventing work and jobs, the demand side changes, and an organization can better determine its future work supply requirements by each source (permanent employees, automation or alternative talent). For example, a water utility company was concerned about impending retirement levels in its workforce and the resulting workforce gaps in the field and at facilities. If the company had simply modelled the current workforce and retirement eligibility, it would have planned to address a 30% workforce gap over the next three to five years. This would have required a high level of hiring, investment in training and transition management. But they didn’t just model based on their current approach to how the work got done. They dug into how the work was changing. Human resources met with IT to understand its three-year technology roadmap and learned that IT had many plans for automating field-based work as well as facility management. Analysis identified where technology would augment or even substitute some of the work. Automation’s impact on jobs accounted for a shift in how work was done, and based on new technology and digitalization, new work was also identified. The net result was a workforce plan that addressed an 8% workforce deficit with a forecasted 15% skills shortage.

Underpinning these three pillars that re-envision workforce planning are challenges related to ESG measures and DEI approaches. The new world of work has made it complicated to plan around just one dimension. It’s important for organizations to understand how their work and workforce is changing and identify improvement opportunities for organizational efficiency and effectiveness. Decisions must be based on data rather than anecdotes. In carrying out a close, more thoughtful review of evolving work goals and changes, workforce planning is a foundational action that can enable the organization to successfully manage through change and new risks – whether it is to respond quickly to a growth spurt, sustain profitability for the long term or adapting to sudden and massive shifts in the competitive landscape.

Disclaimer

A version of this article appeared in #evolve Q2 2022. All rights reserved, reprinted with permission.

Authors

Tracey Malcolm
Global Future of Work Leader, Human Capital & Benefits practice

Global Innovation and Product Development Leader, Rewards Data Intelligence

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