The pandemic and the gradual transition to hybrid work models have accelerated the need for new skills and qualifications. This includes above all social and emotional skills, leadership skills and the ability to think critically and to make decisions.

Recent research by McKinsey and Mercer come to the following conclusions:

  • 79 percent of CEOs are concerned about the availability of skills that will impact innovation, cost, quality and growth in their company.
  • In addition, 70 percent said they expect to employ more highly skilled temporary workers in two years than they did before the COVID-19 crisis.
  • 69 percent stated that their companies were building up more skills than before the crisis.
  • 58 percent of respondents believe that closing skill gaps has been a higher priority since the pandemic began.
  • 53 percent of companies identify new skills that are needed for their activities after the COVID-19 crisis, but only 14 percent have implemented competency-based talent strategies.

In the following, I will therefore step deeper into some dimensions of strategic workforce planning, which are also highlighted in the “Nine Dimensions for Workforce Planning ™ model“.

Basics of strategic workforce planning

Effective workforce planning requires a solid foundation, rooted in business strategy, a strong understanding of basic methodological principles, and the ability to segment the workforce. This requires close cooperation between strategy and HR experts.

From a strategy perspective

  • companies need to strategically look at future skill needs and market supply / demand and adopt a practical approach to talent and reward practices that allows for greater flexibility and resilience.
  • companies need to prepare their employees for a future in which new and evolving skills and ways of working prevail and where continuous learning is the key to relevance in the workplace,
  • managers need to think more thoroughly about what the workplace looks like in a post-COVID-19 world.
Looking at the methodology
  • one finding is particularly important: The company’s success depends largely on the fact that skills and qualifications are the predominant language of the organization, not jobs or functions! A culture that supports learning is also necessary.
  • according to McKinsey, three new principles should be highlighted that were derived from best practices:
    1. Perform a comprehensive skill inventory across the organization to understand where to start and how to close skill gaps.
    2. Create a “skills hub” to manage, operationalize and scale talent. For example, an insurance company’s hub offers learning modules in areas where roles need to change to help employees acquire the skills they need. If roles no longer exist, the hub offers further training to help people qualify for a different role or, if possible, to find “related” roles.
    3. Take an ecosystem view. Integrating skills development while taking into account the entire ecosystem can help businesses as well as communities and other stakeholders. A current example is the partnership between McDonalds and Aldi.

Strategic workforce planning resources

Effective workforce planning requires a well-balanced and qualified team, good technology and access to high-quality data. This is especially important when it comes to competency-based workforce planning.

COVID-19 has demonstrated the power and value of skills and qualifications. The point now is

  • to make the employee development offer better known and, if necessary, adapt it to meet business demand,
  • to align competencies and qualifications towards the future strategy and, at best, close gaps,
  • to introduce competency-based processes that help ensure that learning leads to rewards, recognition, and advancement for employees and impacts performance goals.

There are currently three categories of workforce planning technologies: Workforce planning and organizational design, talent market analyzes and talent management / skills inference. These technologies are still in their infancy. Looking at the first category, I would like to highlight AI-based skill taxonomy technologies:

  • With the help of a skills taxonomy, candidates can be automatically compared with job offers, internal candidates for projects can be found, and the qualification gap between a person and the intended job can be identified.
  • The best known skill taxonomy is O*Net. There are others like the European ESCO, the UK Skills Taxonomy and Singapore’s Skills Framework.
  • Companies like IBM, Revelio Labs and SkyHive use technology to build a skills taxonomy. They collect as much information about jobs as possible from sources such as profiles on LinkedIn, posts on job boards, and other relevant sources that they can find. In addition, they use natural language processing to understand the jobs.

The role of internal and external data cannot be overestimated. This includes recruitment data, professional career data, learning and development data, performance data and external data. The latter are obtained primarily from professional network sites, specialist publications, patents and blogs. A lot more information on this can be found in the classic “Digital HR: Smart and Agile Systems, Processes and Structures in HR Management” (Ed: Thorsten Petry and Wolfgang Jäger), in which Joachim Volpert and I were also able to place an article.

Added value of strategic workforce planning

Effective workforce planning provides tangible added value for a company. The focus is on driving business outcomes such as market growth, innovation in R&D or financial success through the sale and profitability of current products and services.

In addition to the cultural aspect, our projects for executing strategic workforce planning have shown that

For this purpose, we have developed so-called assessment guides, which also form the “bridge” to the evaluation. Here are some insights and approaches:

  • It is important to distinguish between lagging indicators (e.g. percentage of female managers), leading indicators (e.g. availability of qualified female talent for positions that are critical to success compared to demand) and strategic indicators (e.g. ROI of female talent in a pool).
  • Models for added value in education and training (such as the Predictive Learning Impact Model by Nick Bontis, evaluation levels according to Kirkpatrick) should be used and incorporated into decision-making processes.
  • eQ8 has developed the so-called “5C framework”, which treats the workforce not as a cost factor, but as a value-adding asset:
    • Capability: A company knows the workforce it needs to fulfill its key imperatives, strategy and objectives.
    • Cost: A company has optimized all employee-related measures over the entire employee life cycle and beyond.
    • Community: The organization is really able to ensure social responsibility through long-term planning and proactivity.
    • Commercial: The organization is able to meet its core business drivers and transformation agenda.
    • Creation: The organization is fundamentally shifting its view of the workforce from a cost factor to a value-adding asset.

The evaluation is therefore essentially geared towards business outcomes. As I have pointed out, this goes far beyond the traditional view of economic logic and the optimization of a cost base! Such an approach based on sustainability completely opposes the procedure that is often still practiced – short-term, isolated and reactive. Continuous communication about procedures and results in the company is essential for this.

Conclusion

Looking ahead, there is a big and structural concern: ensuring that people have the skills they need to find employment in a changing world.

I advocate challenging old ways of thinking, including assumptions about what employees want and what they are capable of. Employees are often able to do more than managers trust them. In addition, competence-based workforce planning with action plans based on it, for example in personnel development, contributes to greater commitment and loyalty among employees.