1. Change within HR:
The first thing to remember is that change doesn’t happen if you just ask nicely.  People must be motivated to change.  When you’re talking particular behaviors at work, this means rewriting job descriptions and changing evaluations and rewards.  There will also be training involved.  This is fairly comprehensive, so most organizations build the capability in what we call a Center of Excellence (CoE).

A CoE is a small set of employees with specific skill sets who enable workforce planning for the entire organization.  They run the analytics, ask the tough questions, and in the process, train HR business partners over time.  This allows an organization to look at job descriptions, performance criteria, and rewards for around 2-4 people rather than the entire HR community.

Having a software system in place enables the CoE to have a broad reach within the organization as it automates the analytical component, ensures consistency of definitions, consistency of process, and will enable the CoE to train the HR business partners much more quickly.

2. Change in interactions with business managers:
Often, the introduction of workforce planning is one of the first real strategic conversations business managers have with HR partners (this, of course, is not always the case – just a general observation).  While the conversation has previously been around the current state of people and meeting certain targets, it now shifts to a theoretical vision of the future and translating that vision into human capital requirements.

Some managers aren’t comfortable having this dialogue so it is critical that the HR representative has a solid understanding of the strategy, can push back when further clarification is needed, and can facilitate decision-making.  It is also important to maximize the use of management’s time to avoid unnecessary or redundant tasks.  This is the best and quickest way to have workforce planning branded as a business initiative rather than “another HR program”.

I have found a good method for opening the door to conversations with managers.  Approach the manager and say, “I’d like to speak with you about your long-range planning so I can understand the workforce requirements necessary to enable you to execute.”  After all, workforce planning should be a part of strategic planning, and at its essence it’s a risk audit that ensures you have the right people in place to execute on business strategy.

The key here is to establish a process that works with and on the business and is flexible enough to meet varying needs across the organization.  (SuccessFactors has established a methodology based on its 30+ years of practice that you can see below.)

My tip for a successful change management process:
Before you get started with workforce planning, stop and think about the change on each of the groups involved and what communications need to be in place to facilitate awareness and buy-in.  Concentrating on the foundational elements will pave the way for a successful process.

SuccessFactors Workforce Planning Methodology

SuccessConnect 2010 kicked off today in the beautiful city of Frankfurt, our final SuccessConnect destination for 2010.

The event started with a bang with the ever energetic, Lars Dalgaard taking the stage.  Announcing the acquisition of YouCalc, a Danish company, to a jam packed house, Lars explained how SuccessFactors latest purchase will let business create and share custom reports and analytics from the cloud.

Jay Larson, SuccessFactors Head of Sales, was next up to the podium. Jay discussed HR’s new economic reality – do more with less: more ROI; greater business impact; connect HR with the business; and close the gap between strategy and execution.  He then went on to share success stories from those who have implemented more for less and have “BizX’ed” their organizations.  

Dmitri Krakovsky drilled further into SuccessFactors recent YouCalc acquisition explaining the new Calculator in the Cloud feature that will allow users to perform analytic mash-ups and what-if scenarios from any cloud based application. Dmitri also expressed his excitement over SuccessFactors new partnership with Jobvite, pointing out that the time to hire is not as important as hiring the best.

The final SuccessConnect of the year showcased the best of the best with Norbert Kleinjohann, CIO Siemens AG and Marion Horstmann, Corporate Vice President of HR, Siemens AG sharing their secrets for success.  

Marion Horstmann shared Siemens transformation of the HR function using a global people strategy of which transparency was a key element. Marion expressed her delight that her three requirements for a strong HR strategy were inherently delivered via SuccessFactors solutions: integrated applications for all people processes; a uniform product completely that speaks in a single global language; and recurring efficiency and higher quality.

Norbert Kleinjohann then went on to discuss how Siemens positioned their standard HR system, labeled 4Success, for success. “During the evaluation process, Siemens IT team worked with their HR colleagues to assess 50 possible suppliers, both on premise and in the Cloud. We awarded the contract to SuccessFactors in March 2009, based on functionality and usability and the provisioning of an integrated solution with consistent data models,” says Kleinjohann.  (See article SuccessConnect: The Biggest Cloud in the World) Kleinjohann cites: “We have seven modules in place – target setting, performance management, compensation management, roundtables, career development planning, recruitment management, and employee profiles. We went live within 6 months with the target setting module which we rolled out to 170,000 employees. We now have 400,000 employees information loaded into 4Success and have 40,000 log ins per day.” SuccessFactors had the fastest implementation, best functionality, usability, and integrated capabilities.  Kleinjohann says: “I believe that Cloud Computing will be adopted by IT sooner than we expect.”

The audience enthused over the Siemens presentation stating that it was a pretty impressive story for an impressive first day in Frankfurt!

When you look at the fact that mobility and turnover have decreased at the macro level and retirements have reduced due to the economic climate and the decimation of retirement funds, you can begin to understand why some organisations have not made significant investments in their human capital processes.

BUT… organisations are going to be strong-armed into examining their human capital operating models with recovering market conditions set to double current retirement trends and mobility and turnover significantly increasing. 

The million dollar question at this juncture is: “How can business leaders ensure that their current workforce issues don’t blow up into critical business issues?”

The answer (and I will pocket that million thanks!): workforce planning.  Workforce planning enables business leaders to unpack the anatomy of their workforce, understand key business drivers, implement necessary change to business operating models, and most importantly, align human capital strategies with business strategies.

What are the critical elements for a successful workforce planning process I hear you ask? The workforce planning process must be aligned and integrated with all organisational planning and budgeting processes.

Is everyone committed? Stakeholder engagement is an absolute must to ensure that the process is allocated adequate priority and resources.

Workforce Planning… Is it just a Human Resources initiative? Definitely not! The business needs to adopt workforce planning and have a sense of urgency committing to planning into future years, well beyond this budget cycle. 

Lastly, do we have the skills, capability and experience required to establish and execute on the Workforce Planning process? Resources that are able to initiate and implement all pieces of the Workforce Plan are unique and extremely sought after.  Generally, this is where we see organisations engage expert assistance and seek partners across the business to assist and execute on the planning process.

As talent pools are continually placed under stress, workforce planning at a strategic level will become an essential component of human capital operating models.  Understanding how to position your workforce to obtain the best return on investment will sustain and grow the success of your organisation into the future.

Don’t rest on your laurels, business leaders – it is time to take the bull by the horns and show those environmental factors (such as the economy, labour shortages etc.) who’s boss.

The economy is turning, and with it, investments in HR and WF Analytics and Planning.  Conferences are better attended compared to the past couple of years, which my highly tuned analytics skills tell me is a good trend.  But the bigger picture is that IT budget purse strings are being loosened, and in ways that free up internal resources:  http://online.wsj.com/article/BT-CO-20101004-704380.html.   HR and workforce investments can now help HR professionals to focus on what has admittedly been a niche-y area within HR.  Workforce planning and analytics skills and practices are growing in demand, even ahead of any unanimously recognized economic recovery (almost there…where are the jobs?!?).

Workforce Planning and Analytics create business value and bolster business strategy.  Given the titles of presentations, the conversations between conference delegates, and the overall language coming from HR and non-HR professionals, HR is clearly more focused on strategic, operational, and financial business outcomes.  I attribute much of this to workforce analytics and planning; now, not only is HR gaining support in this space in terms of investment, it is also strengthening its credibility and strategic impact on the business it serves.  

Firms’ Analytics and Planning capabilities can mature quickly.  What we have historically seen as evolutions in organizations’ HR capabilities in these areas, sometimes taking years, is no longer necessarily the norm.  Comcast is one example of a company presenting their story of accelerating the pace of change, “getting good at” workforce reporting/analytics and driving impactful results quickly.   A common theme: the critical success factor is engagement and support from business executives, as well as strong leadership of the function. 

The Foundation is set for Strategic Workforce Planning.  It has commonly been a relatively linear process for HR to 1) get some data, 2) make sure it’s clean, 3) look at the history, 4) understand why things happen and 5) begin to get predictive with that knowledge.  After that, it would take a while to then 6) look ahead and model workforce availability against business need.  Practically speaking, HR went through a long process, taking several years, to get to workforce planning:  obtaining data and cleaning it up, focusing on reporting quality, then start and grow analytics improvements, before beginning workforce planning.  

However, I’m seeing more companies turn that maturity model on its head.  The practice of strategic workforce planning is becoming both more foundational and more sophisticated.  I have heard several stories from people who have successfully practiced workforce planning on Excel files, using a pilot approach that is less dependent on rock-solid systems and data and more reliant on strong capabilities, relationships, and organizational readiness.  Some firms even have what they consider beginner-level reporting and analytics with pretty advanced workforce planning processes.  This means to me that 1) while great analytics capability absolutely strengthens workforce planning, it’s not a requirement to get started, making inertia less of a risk to workforce planning than ever before. 

Client/vendor services and relationships are of critical importance in Analytics and Planning.   My company, SuccessFactors, provides workforce analytics and planning software as a service  – “in the cloud.”   In addition to our industry-leading workforce planning and analytics experience and expertise, we also deliver real empathy and familial commiseration to our clients.  I frequently hear of newcomers’ admiration of that genuine care – they want us to put them on cloud nine, too.   And SuccessFactors is investing significantly to emphasize these areas even more to enable us to grow while driving our clients’ success.   All of these lead me to believe that, while having bulletproof, ever-more innovative products is paramount, we’re powerfully differentiating ourselves in how we take care of our “members.”   We are on their team, we don’t succeed if they don’t succeed; and their knowledge of our commitment will bring long-term success for both sides of the relationship.

Professor of management at Drake University in Iowa, Steve Scullen, found that forced ranking, including the firing of the bottom 5% or 10%, results in an impressive 16% productivity improvement.

Companies that are able to quickly compare the performance of their people to find high and low performers have an advantage over those who cannot. Low performers actually cost the company money, so when a business manages them out, they see an immediate benefit. The opportunity cost is even higher. If high performers contribute about 5 times as much as low performers, as our friend and thought leader Dr. Peter Cappelli has found in his research, the opportunity costs is huge. Imagine how much more value the company could generate if they could replace low performers with high performers.

These kinds of optimizations are on everyone’s mind in todays slowing economic environment. SuccessFactors decided to tailor a solution for optimizing the workforce by building a tool that allows managers to stack rank their employees.

Of course stack ranking isn’t just about managing out low performers, but it is also about ensuring that you are able to find and cultivate your best talent. Those top performers who contribute 5 times as much as the low performers should be rewarded, leaders should be identified and trained. Competencies should be compared and managed across teams to ensure that the right capabilities are in place. Stack ranking is a great tool not only for optimizing your workforce, but also for building it. 

Already rich with performance management data, the SuccessFactors Stank Ranker helps managers to:

• Visually Rank Talent – Instantly identify your top-ranked players so that you can optimize your team by motivating and cultivating your best people. Give limited rewards to top employees that deserve extra recognition, or quickly identify low performers to let go when faced with tough layoff decisions.
• Go Beyond Performance Reviews –Stack Ranker expands the formal review process by letting you capture new characteristics for a more holistic assessment. For example, you can incorporate factors like criticality of the role into ranking or other criteria to serve as tie breakers.
• Assess Everyone at Once – Quickly assess your entire team across critical competencies and criteria in real time — all in one place. Side-by-side rating promotes more accurate relative assessments.

Stack Ranker was designed to help companies act now. Organizations simply cannot afford to carry the dead weight of low performers in these uncertain times. Furthermore, they need to move quickly or they will be outflanked by their competitors. Tools like Stack Ranker are critical to succeeding in today’s environment.

People can learn from failure – there is an upside to chances taken, but if a person knows they will fail, the sooner they do it the better. Take the case of a sales rep constantly dragging on with an opportunity that never will materialize – better to get to fail and move on, to free up time for other accounts.

When it comes to managing employees not only does it take some investment to get people fully productive as we’ve researched with Dr. Hallowell at PDI, but there is also a significant cost to keeping disengaged employees. Necessary separation is important to manage.

“I feel so good–I’m almost happy” – Al Bundy. It’s not just about the bottom line, people should work where they can be engaged in their jobs. One company, Zappos, really gets it. After the first week of work, they offer their new hires 1000 dollars to quit. They figure, if a person takes the money, he or she isn’t really engaged and didn’t belong there in the first place. This is what understanding human capital is all about, finding ways to maximize those factors, like engagement, that really impact performance over the course of an individual’s career.

Today, new hires have an average tenure of about 3.5 years, which is not a lot of time to get them up to the plate and hitting home runs. Don’t worry if your rookies make some mistakes – each mistake can provide valuable insight into setting the right course for your new hire, and accelerate successes . Opportunity is born from failure. Entrepreneurs get it. Zappos gets it. So could you.