The importance of human resource planning


 — June 4th, 2018

The importance of human resource planning

If you follow us here, you'll know we've written not just about the reasons for human resource planning, but about the 3 key steps that must be taken: assessing your current skills, looking to the future to determine which skills you'll require later, and investing in human resources to ensure you have the balance right. But what happens when looking to the future drops a bombshell? New research is revealing a new and transformative reality for human resources management: automation is about to change everything.

HR professionals already have automation on their radar and know to anticipate a certain amount of redeployment or retraining as roles are mechanized or become obsolete. But the latest research into automation from the McKinsey Global Institute shows the impact on worldwide workforces may be beyond all previous estimates.

By 2030, McKinsey projects showed that 14 percent of the entire global workforce may need to switch occupational categories due to digitization, automation, and advances in artificial intelligence, all of which will utterly change work and how it's done.

Up to 375 million workers could be affected, as the skills that companies require from their human workers undergo a major transformation. The implications for workforce planning are huge, specifically in training and development as staff have no option but to acquire different skills.

McKinsey has likened the upcoming change to the seismic transition from an agricultural to an industrial economy; but, unlike in the late 19th century, the change this time will happen much faster. Previously, natural attrition meant that people came to the end of their working lives before they personally needed to make the change. In the case of automation, reskilling workforces will be vital. Sixty-two percent of executives surveyed believed they would need to retrain or replace "more than a quarter of their workforce between now and 2023," specifically because of automation and digitization.

Older workers: staying productive, with no stigma

Given the clear change that's coming, it's surprising that more organizations aren't doing more to accommodate and empower older workers, many of whom are stigmatized if they work into their 70s or beyond. The number of employees working later in life is rising sharply: in the UK, according to research from Canada Life, 75 percent of employees are expected to retire after the state pension age of 65, in many cases due to rising living costs and nest-eggs that haven't grown as anticipated, due to low-interest rates.

The same research revealed that support for older employees in the workplace is perceived to be low, and declining, rather than improving. Respondents said that older workers could be best supported by workplaces who offered things like flexible working and part-time opportunities – ironic, as these are the same qualities that may appeal to early career workers trying to fit work around young families. Workforce plans that proactively accommodate staff preferences like these are those that are most likely to be successful, resulting in stronger loyalty and more overall stability in the resource pool.

Going mobile: what if staff won't work abroad?

Increasing globalization is another new and growing pressure on workforce planners. One of the main objectives of human resource planning is to ensure the right skills are available when and where a growing company needs them, but what if the company needs team members in international offices, and can't persuade the right staff to go?

Research by Cranfield University discovered that 1 in 3 organizations are encountering shortfalls in the number of employees needed for international assignments. A third of organizations said they currently have less than 60 percent of the number of employees they need for these roles. Experts advise companies to think at the recruitment stage about global mobility, rather than assuming they'll be able to persuade existing staff to travel.

Interestingly, the research found that employees who are willing to work internationally don't typically do it for the money; but on return to the home country, money may be a strong motivating factor in persuading them to leave the organization and go elsewhere. For workforce planners hoping to strike the right balance between demands of the organization and priorities of the team.

It's important to develop what the researchers called "a global employer brand," communicating the international aspect of the organization not just in its recruitment materials, but right across all its communications, marketing, and advertising, so that candidates perceive a global element and are attracted in part by the chance to work internationally.

Keep communicating and assessing employee priorities

Whether it's to assess which employees are willing to travel or other aspects of team members' career development, it's important to keep in close and regular contact with staff members. Harvard Business Review notes the trend, particularly among large organizations, of drifting away from annual performance reviews to more frequent appraisals and feedback. Right across sectors, from retail to consumer products to financial services, there's a rising trend for more immediate feedback throughout the year. Interestingly, a pilot at GE attracted just 20 percent of managers to participate in a continual feedback process. But putting in place "change champions" changed minds, which resulted in 46 percent of managers getting involved and exchanging 3,000 pieces of feedback.

Regular staff assessment, including surveys, remains a vital part of the workforce planner's toolbox, allowing the organization to get a much clearer picture both of the current state of play and insight into the longer-term priorities of team members.

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