Talent shortage despite crisis

Many companies do not implement their strategic workforce planning systematically even though they consider this management tool a main factor in sustainable business success. 81 percent of companies rate the importance of strategic workforce planning as high; however only 35 percent are satisfied with their workforce planning results. These are the findings of the »Strategic Workforce Planning« study conducted by the HR consulting company Hewitt Associates and the Institute for Executive and Human Resource Management at the University of St. Gallen, Switzerland. The study surveyed 129 personnel managers of multinational and medium-sized companies from a variety of sectors largely based in the German-speaking countries.

Despite crisis need for talent remains high

The need for top talent persists despite the economic crisis: Twelve percent of the companies surveyed currently report an increasing demand. 67 percent of those companies even expect the need for talent to increase drastically within three to five years, with the demographic trend intensifying at the same time. As a result, Europe will suffer the biggest talent shortage compared to other areas around the globe: More than 80 percent of the companies surveyed have problems filling open positions. The biggest difficulties are in recruiting staff for IT/Engineering and Sales: In each case, around 70 percent of businesses have difficulty finding people for jobs in these two professional groups.

Strategic workforce planning becomes more and more important

For more than one third of the companies surveyed, the demand for talent is so high that their management is forced to modify corporate strategy. Because of this, companies already attribute a high degree of importance to strategic workforce planning and expecting its significance to rise considerably in the coming three to five years. More than half of the companies participating in the study forecast that workforce planning for key positions will gain in importance; 27 even expect to see it increase considerably.

Implementation of workforce planning is often inadequate

Today although more than 70 percent of businesses implement strategic workforce planning as a management tool, they tend to do so in a rather unstructured manner, in part isolating the process from other HR activities. This leaves them only partially content: Around two thirds are satisfied with short-term workforce adjustments and operational workforce planning on an annual basis; however with workforce planning for key positions and for the company overall, the satisfaction rate is only 35%. “Companies have considerable backlog demand in implementing their strategic workforce planning.  Only when this planning is implemented systematically can businesses profit from the advantages of this management tool,” said Ursula Knorr, head of Human Resource Management at the University of St. Gallen.

Having the right individuals responsible for the process is essential

The Hewitt study has shown that strategic workforce planning works best when the key players in the company are responsible. This means HR and the top management, with optimal results when they work together with line managers and strategic corporate planning. Their involvement in strategic workforce planning yields the highest degree of productivity and efficiency, enabling the company to best adapt to changes in the market environment.

Continuous workforce planning pays off

A further success factor is organizing strategic workforce planning as a continuous process. Only eight percent of the companies continuously plan their staffing requirements. Most firms, in contrast, update their plans only once a year (85 percent); eight percent do so every two years or even less frequently. “Continuous updates to the plans are worth the effort. Management is more satisfied with the results and there is a higher willingness to implement measures on the basis of the results. Businesses that only plan sporadically run the risk of strategic workforce planning being viewed as nothing more than a compulsory administrative exercise,” said Charles Donkor.

25% of the companies still do not use any IT tool

Many companies have room for improvement even in selecting planning methods. Although a good fifty percent use gap analysis of workforce demand and supply, only 17 percent apply modeling based on a variety of scenarios. 25 percent of the companies have yet to implement IT tools to administer strategic workforce planning. They base their strategic workforce planning solely on executive and HR management evaluations.  Moreover, it is essential to standardize and develop existing employee data. With such a database, strategic workforce planning can be a success.

Source:

Hewitt Associates, www.hewitt.com
Institute of Executive and Personnel Management, University of St. Gallen