Nicholas Garbis – Workforce planning and analytics: planning now for the future

Steve

Hi, this is Steve Hunt with People Performance Radio. This week we spoke with Nicholas Garbis, who is a Consultant with Infohrm, which is actually Info-h-r-m, that’s how it’s spelt, which is a workforce analytics and workforce planning company, and Nicholas discussed the use of workforce planning and how to leverage HR data to really drive better business decisions, has some really good examples of some very advanced approaches to predict what kind of people are you going to need four or five years down the road, where are you going to get those people from, and how can you build a business case to invest in the processes required to ensure that a company has the people it needs to achieve its goals, not just this quarter, but three or four years from now. So let’s listen to Nicholas Garbis from Infohrm.

Hi, this is Steve Hunt, you’re here with People Performance Radio, and this week we’re talking to Nicholas Garbis, who’s a Senior Consultant for Infohrm, which is spelt Info-h-r-m, which is a company that specializes in workforce planning and workforce analytics, and Nicholas has an interesting background in statistical analytical analysis that he brings to HR that he’s going to be sharing with us, so Nicholas, thank you very much for appearing on People Performance Radio.

Nicholas

Thanks for having me Steve, I appreciate it.

Steve

So Nicholas, can you give us a little background about what Infohrm does, and specifically your background in this field as well?

Nicholas

Well, my background is being in HR technology and HR business intelligence and workforce analytics and workforce planning with a major retail organization. For the last five or six years, that was my responsibilities over there. I joined Infohrm in September as a Senior Consultant, and now am helping multiple organizations do a lot of the same things that I was doing in previous roles.

Infohrm is a leader in the workforce analytics and workforce planning space, been doing this for about 25 years, largely in Australia but starting in about 2006, after working with the CLC Metrics Program, Infohrm established a North American presence, and now we have about 50 large companies that we’re working with, including the likes of Target and Starbucks, Gap, etc.

Steve

OK, can you give an example of what a typical project that Infohrm would do, how do you bring those two things together, workforce planning and workforce analytics?

Nicholas

What we provide to our member base is a service of taking data from various HR technology, all the major core HCM systems, other pieces of technology, including Excel spreadsheets, and we take that data and we integrate it in a business intelligence fashion, getting it integrated so that it’s ready for analysis, ready for reporting and ready for workforce planning, so it is a very HR, highly tuned HR-oriented business intelligence solution, and then from there our clients are able to do things like spend more time with insights and making a strategic impact, and less time with data heroics.

Steve

So basically it sounds like what you do a lot is take a lot of the data around talent that organizations may have lying around in Excel spreadsheets and other HRS databases, and put it into a format where they can turn that data into useful information and knowledge?

Nicholas

Yes, and that’s the technology piece, we also work with our members to help them make that strategic impact, so to keep pushing that so it’s not just a solution about the technology, that’s just an enablement piece. From there we partner with them very closely on making strategic impact, and we also offer the same types of services on a one-off consulting basis, so we get involved in some really interesting advanced analytics, some very interesting work for supplying and engagements as well.

Steve

Now, can you give a little more information specifically on workforce planning and analytics, because those terms are used a lot now in talent management, but I think people don’t really get into exactly, what do you mean by workforce planning or what do you mean by workforce analytics, and I think different companies have different approaches to it. Can you talk a little bit about specifically what you guys do when it comes to workforce planning and analytics?

Nicholas

Sure, workforce planning, the term gets ballied around quite a bit, and so I’ll do my best to articulate what I think it is, and what Infohrm believes it to be. It is really the strategic process of looking at your business strategy one, three, five years out, potentially longer, and where is your business going, and what are the human capital demands of that business strategy? And then once you know that, there you’ve translated it into the need for a workforce, and then the other piece of it is to look at the supply side, and say OK, I’ve got this particular workforce now, this is the quantity, the competency capabilities of this workforce, and then using the analytics piece in forecasting retirements and terminations and things like that, to see that that workforce is not going to be there over a period of time, and you may also have mismatches in skills and things like that, so then taking the two, the demand and the supply, and looking at the gap, identifying how big that gap is, and what are the solutions to close it, either by reducing the rate of attrition on the supply side, or are there different mixes of bringing new talent in. In some cases, in some dramatic instances, the business strategy itself may be too aggressive, and the human capital constraints will limit the ability for the business strategy to actually happen, and they may need to pull back on it.

An example would be a hospital that is about to expand, and has a very aggressive plan that really won’t work, they won’t be able to staff it accordingly with enough nurses in that period of time, so they alter the business strategy, again that’s a pretty dramatic example, but it is real.

Steve

Yes, I guess you’re going to talk a little more about that, because I think one of the things you’re always, how can HR have a greater seat at the table, and one of the areas that I’ve always thought is around workforce planning that I have seen personally in my own career, things like major stores getting all the infrastructure built, and then not being able to open for lack of employees, and certainly you see the same thing happening in hospitals, I’ve known hospitals that actually get a lock on the local nursing population and do that as a way to keep competitors out of their geography, but I don’t know how formal that’s done, so in that sense around, do you have an example of clients you’ve worked with where they’ve really used workforce planning and analytics as a way to say, look, HR isn’t just about touchy-feely soft stuff for making sure people get paid, it’s about making sure you actually have the people needed to run the business, and having some really hard numbers that get attention from non-HR people – can you give an example of a client where you’ve seen that happen?

Nicholas

Absolutely, I think workforce planning is really the activity that can be done in HR that is most strategic and has the best chance of really engaging the business. In fact, workforce planning is most successful when it has strong business participation, and even business ownership really.

An example, Greater Baltimore Medical Center, a regional large hospital in Maryland, had done some workforce planning, they actually had savings projected of $4 million over a two-year period as a result of doing a workforce plan, so I’ll give you some information about how they got there. They looked at their demand for workforce number, and this is for nurses, so they did this workforce plan for nurses, and they looked at increasing the need for, mainly for services, and their nursing population that was their current supply, was peeling off, in other words a termination, their supply was going to be going down. They were going to need to hire a given number of nurses over the next one, three and five years, based on just expected termination rates, and the numbers were staggering, of what they were going to have to hire, and how much it was going to cost them to hire, so they re-visited it with analytics, so that’s where the two kind of join up, and they found out that some of the reasons that they had were tension problems with nurses was, the length of the shift, inflexibility in schedules and some aspects of it, they were able to recraft some of their policies, so making strategic decisions using that information, the driver was the workforce plan – we cannot afford to lose all these people we have and replace them, because it’s just too hard to hire them and it’s too expensive to use contract labor. So they adjusted some of their policies and made those strategic decisions, and the result was a reduction in the use of contract nursing, which is more expensive, and a reduction in the turnover rates amongst those nurses. They all said, the savings were projected for $4 million dollars in two years, that gets people’s attention on the business side very very quickly, and they have now very strong engagement across the business and HR teams centered around workforce planning.

Steve

That’s a great example, I think the key is showing that there really are some very hard costs of things like turnover which is well known, but bringing that back and saying it’s something that the company can do something about too, by diagonising the reasons for turnover.

Now, the key to that is having good data to actually do the analysis, which is often a struggle. When you look at companies, what is the data they should be collecting that’s going to have the most value in terms of helping them to do effective workforce planning and analytics?

Nicholas

The beginning point really, it has to start with the, what we call the “core workforce and mobility data”, and that’s usually in your main HRS system, and some organizations have more than one, which poses different challenges, especially if you have a company with a history of mergers and acquisitions, and have five or six or seven versions of even the same app, like a PeopleSoft or an SAP. That’s really the starting point, because once you have that, you’ve got to get the basic blocking and tackling out of the way, what’s the headcount we have, and over time how many have we had, what are the terminations, and then you start to get into building a little bit more complexity, you’re putting the rules in place to gather up things like transfers and promotions, and different movements within the organization, demotions included.

That’s the core, once you do that you can start attaching on data about succession planning and performance management, survey data, financial data, so that’s the hub where it all starts, but it takes a bit of effort to define all the different business roles, these are complex organizations with lots of people keying data, there’s lots of rules that have to be interpreted to understand this was a termination, PeopleSoft threw seven rows of data in on a given date because of some different jobs, and to be able to understand that data at a large scale level and apply a business rule across all that, that’s where the value comes in.

Steve

So there’s a lot, it’s not just having the data, to go off and just turn in what is often very unclean, messy data and finding a way to extract the kernels of useful information from it, it’s probably, it sounds like it’s where you guys do a lot of your focus and add a lot of value, in taking data people didn’t even know they had perhaps?

Nicholas

Yes, well actually it’s finding issues in the data that people didn’t know they had, I think is really quite often what happens, but the idea is to automate all of that stuff, all of the data heroics that go on right now in HR to produce a seven page PowerPoint once a month or once a quarter, it can take 100 hours, and I’ve done it before, and it’s not very fun, but when you can get the data automated into something like that, it allows you to spend more of the time moving up the ladder into more strategic, more valuable efforts, it allows you to gauge the time that people want to engage with the business about making better decisions regarding human capital, now that’s how you get enabled to do that, you take all the smart people that know the data that are just too busy setting up their own databases and building all these complex reports and using Excel and PowerPoint all the time, take those people and release them into higher value activities.

Steve

That to me, that makes a lot of sense. One of the things I’m curious about, having had done workforce planning in different areas throughout my career, and it really seems like it falls into two broad categories: you have workforce planning for relatively stable organizational structures, and I’d put hospitals in there, certainly retail, where you have store managers or you have nurses, and those are not going to go away, they’re going to look the same over the next five or ten years, they’ll change somewhat, but not radically, and then you have IT or high tech organizations where literally, there’s jobs that exist now that didn’t even exist ten years ago at all, and that poses a whole different set of workforce planning. I’m curious if Infohrm focuses more on the retail, hospital, or if you’ve done work in some of these very constantly reinventing industries, and if so, how you approach that work differently, or is it really, do the same principles apply?

Nicholas

We’ve been doing workforce planning for about 25 years, and so we have probably the most experienced staff in the space, and something like IT, an over-emphasis on a particular skill set, rather than a competency set, would lead to the types of problems you’re describing, so we might have somebody who’s really great at the job of programming, but then the next thing that comes up is going to leave us short-handed, so you switch the workforce planning to, we’re going to need so many people at this level with these competency sets, the learning, the ability to learn, the ability to execute and things like that, getting away from some of the hard skills, as the plan goes farther out into the future, where those hard skill requirements become less and less clear what they’re going to be.

So you can do a workforce plan just based on some abstract numbers, meaning the strategy is, “We think that the complexity of our organization’s going to be growing, and our IT team is going to need to increase about 5% per year”, you can get some raw numbers, and then you can do down farther into that and say, “We’re going to need people at these particular types of roles, project manager roles, programer roles, etc, so you can get that into the critical roles’ model, and you can go into then the leadership competencies and add that into the mix. I think, in the IT example, if you go too far beyond that into things, like specific skill sets, that you’re probably going to be risking the quality of your plan, because we can’t predict out those skill sets five years from now. We can say that learning, an aptitude for learning, would be one of the critical competencies that would enable us to react in those situations.

Steve

Yes, so what I’m hearing is, you really need to think about what sort of data you’re going to use to describe people in jobs, based on the kind of industry that you’re in, but also the timeframe you’re looking at, because I also could argue that, and I’ve certainly seen in some industries like oil and energy industries, where they know very specifically, we’re going to need hydrogeologists, and it takes six years to become a hydrogeologist, and so they start actually working with the university years in advance to plan for these very specialized skill sets, but you have to be careful about doing that, because you could be in an industry where these skill sets will change.

Nicholas

Yes, it really depends on the industry, the mining industry, they’re looking at workforce plans that are 20 and 30 years out. The skills aren’t going to change dramatically, you might have some of the ways they’re approaching it might be different, but they’re going to need so many people for these different areas that they’re exploring and where they expect to be extracting minerals out in the future, so they extend way way out, their horizon is very very long, but it’s different by organization, different by industry.

Steve

Do you work with some of those mining organizations as well?

Nicholas

Yes, actually we work with, in Australia, we work with mining and railway at an industry level, which is not something we’re doing very frequently in North America, but the industry organizations have been taking the lead on co-ordinating for their membership workforce planning, so at a large level, which then, to your point about going in and influencing the educational system, that’s where they take that then. Now as an industry group, they can start to emphasize what needs to happen in the educational sphere to prepare the workforce that they need for their industry.

Steve

Well, I would love it if you’d start to do that in the United States as well, I think personally one of the things I know, because some people in my family are professors of engineering, with the statistic that over 60, I think it’s over 60% now, of graduate engineers in the United States are foreign nationals, we’re just not building the specialized skill sets we need 15 years from now, so hopefully you guys can take some of what you’re doing in Australia and bring it over here into the United States.

I have a couple of last questions, one is, you talked about having line level leadership involved in workforce planning, it’s typically thought of as an HR process, and I think that’s so true, because I remember talking to one leader, saying, look, having the business leader complain that they didn’t achieve their goals because they didn’t have the right people, and it was HR’s fault, is like having a pilot complain they took the plane off and didn’t have enough gas, and that’s why it was somebody else’s fault they crashed, it’s like you’re responsible for building your own talent. At the same time, it is hard to get organizations to really make workforce planning a central part of a line leader’s role, I think the good leaders do it because they realize how important their success is on it, but it’s not necessarily a formal part of their role. How have you seen organizations make that a formal part of the line leadership role?

Nicholas

Well, we did a survey on this last year, and it matters a lot, the line leader engagement in the process. In fact, the most successful organizations have the line leaders taking charge of it. So how does it happen? – it’s HR coming up with the reason that it needs to be done, so they’re the burning platform, so once HR can establish that, HR has to own the technology and the process, but not the actual doing of the workforce plan, they’d need to just set the stage and basically set the table for this to take place, and then make sure that it’s done, and the HR business partners, which are sometimes often embedded into those business units, have a significant role in making sure that those plans are created and that it’s moving along. But getting them, and getting the business involved, really starts with, here’s why it matters, and here’s how your business is going to be impacted for the negatively if you don’t, and how this is really an important factor of your success. In a knowledge economy, it should almost go without saying, but it still takes some work on the part of HR to make sure that that burning platform is established, and people know that this is something, it’s a strategic imperative.

Steve

Have you seen companies that have treated workforce planning and maintaining the steady supply of talent at the same level of importance as other things that appear on a P and L spreadsheet, have you ever seen it get elevated to that level?

Nicholas

Not just yet, but it’s true in the world of workforce analytics as well, is there as much rigor and discipline that goes into the decisions related to the human capital of an organization? – as much as the rigor that goes into the financial capital, the real estate capital, the customer relationship analysis, the pricing – all those different functions, the planning workforce analytics area really has a way to grow, and partly that makes for a very exciting journey, both for people like me, who have been practitioners and are now doing consulting, but also for the teams we work with, I think they’re starting to see how much this can impact the business, and they’re seeing their own ability to impact strategy increasing as they do more of both workforce planning and workforce analytics.

Steve

I totally agree, it’s exciting and frustrating at the same time, that what is it – employees are 70% of the cost, and by far and away they get the least rigorous attention when it comes to decision-making.

A last question to wrap it up on, when you look at advice to listeners that are trying to beef up their workforce analytics and planning, they’re trying to get to the next level on it, what advice could you give them as to where should they start, when you want to say, we want to have better insight into where we need to go as a workforce – what would you recommend or just starting points for that?

Nicholas

I think for analytics, analytics is something that I, I use the term “data heroics” a lot, and you can do analytics without any sophisticated system, it just takes more time. I would say to look for a win in the world of analytics is one way to get active in the space, and where you’ve got to look is where the money is, so if you have a particular role in your organization that has a whole bunch of people being hired each year, and it’s part of let’s say a career path, and in retail it might be assistant store manager, store manager and area manager, and everybody agrees that area manager is the most critical role to the success of the organization, well you can start to look at, let’s do some analysis around some of those feeder nodes like the assistant manager, and find out what’s going on and we’re hiring in 600 of these a year, and how is it going, are we keeping people? – because that’s where there’s so much meat, that if you can figure out what some of those stories are, where the organization can tweak their strategy a little bit and have a really big return, that’s where you can start to get the attention of a lot of senior leaders.

The other route is, on workforce planning, to start to create that burning platform about starting to find out what is the business strategy, and just starting to translate that for business leaders, translating the business strategy into, do we have the workforce for this? – what does this mean for our workforce? – starting to ask some of those really insightful questions, will start to get those wheels turning and get the organization primed and ready for taking on some of the hard work that has to be done to really make it happen.

Steve

I think that’s good advice, I think sometimes realizing too that even small changes can have huge financial impacts, if you can reduce, one headcount can often pay for an entire workforce analytics program.

Nicholas

Yes, and on the other side, the cost per hire, one less termination for a senior level person, the retained search fee might be $50,000 or $100,000, and the solutions that we’re talking about are in the low six figure areas, and sometimes even less.

Steve

Well Nicholas, thank you so much, it’s been a very interesting conversation, and it sounds like Infohrm is bringing some ideas that have been developed in Australia, but really bringing into the forefront of the United States, and I think that’s also refreshing, I think some much in the United States we tend to have a very ethnocentric view about talent management.

So any other last comments, before we sign off?

Nicholas

No, I very much appreciate you having me on the show, I look forward to seeing a string of guests coming along in the future, I’ve been an avid listener, I appreciate it very much.

Steve

OK, well thank you very much.

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