Seeing patterns in the chaos: A guide to workforce planning for the future
People & Organisations
The COVID-19 pandemic has accelerated the Future of Work agenda for many organisations, making it crucial to act immediately, backed by informed decisions and a clear understanding of their impact. Diligent decision making is informed by data and analytics: expense management looks at cost drivers; talent looks at capability; and workforce planning looks at demand and supply balancing.
However, siloed decision making could be a barrier to achieving a true Future of Work agenda. Focusing on binary issues in a silo could also have a butterfly effect, creating new problems in other areas that surface long after the immediate issue has been resolved.
How, then, can businesses make sense of the chaos? What are the means of pinpointing the correct workforce decisions to drive the Future of Work agenda while accurately foreseeing how those decisions will impact other parts of the organisation?
In a post-COVID 19 world, the Future of Work will rely on the four pillars of workforce optimisation. Firstly, businesses will need to look at evaluating and optimising people spend based on Return on Investment (ROI) and quantifying the outcomes. Secondly, managing prevalent people risks, such as proximity, innovation, failure to change, reputation, pivotal talent, and diversity and inclusion, will require careful mitigation.
Leaders will also want to ensure agility and resilience, to enable their organisations to adapt and evolve towards long-term flexibility. Lastly, businesses will need to focus on building stakeholder value by balancing the three pillars above with the needs of employees, customers, shareholders, regulators, and the community.
However, changes often lead to binary decisions aligned to an individual pillar at the cost of excluding others. For example, “How do we cut costs?” or “How do we improve our diversity?”.
While these questions are important, addressing them in isolation could cause ripple effects that could impact an organisation’s long-term resilience. Borrowing from Chaos Theory, the decision matrix is akin to a chaos field – disconnected, random, and unpredictable.
Seeking the solution in cause and effect
The current pandemic has provided excellent hindsight on why workforce optimisation is essential for all organisations, giving employers the full picture of the opportunity presented by a Future of Work agenda.
“But thinking beyond the immediate impact of decisions and outside of data silos can lead to complex questions such as: ‘How do we cut costs, and ensure that we don’t cut corners, and compound a diversity issue to develop future skills?’” elaborates Peter Bentley, Global CCO & Future of Work Leader, Human Capital, Aon.
The answers could lie in Chaos Theory. While the decision matrix may appear chaotic and sensitive to the slightest changes, a deeper examination will reveal underlying patterns, correlations, and feedback loops. Therefore, by analysing data that identifies risk and its variants, cognitive diversity, skills, and capabilities, organisations may find the solutions to complex non-binary questions. It will be critical to gather big data and join the dots to discover the correlations between cause and effect.
One upside of this process is that it is also inclusive. Employees who help to capture information on changes in the workforce are rewarded with insights − not only on their personality profiles, but also by suggested roles and potential training interventions that can drive mobility and development. Organisations will begin to see ROI and potential savings through such build or mobility strategies. This way, the Future of Work agenda extends beyond hiring data scientists or developers to build frameworks for workforce design.
Rethinking employee value proposition
A period of three to four months of complete or partial lockdowns in major economies has been enough time for new habits to form and for existing behaviours to evolve. With the changes in consumer pattern and need, companies are still making large investments in perfecting their customer value proposition (CVP).
CVP is built on sophisticated research and analytics on consumer segmentation and behaviour, and meticulous planning to attract consumers to a specific product or service. Data and analytics support this process by creating bespoke value propositions that appeal to individual customer preferences.
Like CVP, businesses now need to focus on developing employee value propositions (EVP) for the future. Just as an organisation builds their CVP on knowing the customer inside out, predicting customer behaviour and needs, and delivering customised goods and services, businesses can build their EVPs using the same discipline of holistically viewing data generated through demographic analyses, assessment tools, engagement, and compensation surveys.
In an unpredictable macro environment that is creating external pressure on businesses for capital, cash, and consumers, a relevant EVP can be the key differentiator.
The first step toward building a roadmap for an innovative talent strategy will be the extensive use of internal data, market intelligence and analytics to fully understand the levers around employee preferences, costs, and role requirements for the future. This can result in tremendous upsides in gaining "talent market share" in a highly competitive post-pandemic market.
An EVP that is built on "alternatives" to suit the needs and wants of various psychographic and demographic profiles will unlock business gains from cost and productivity standpoints.
“The idea is to focus not only on how to survive the immediate crisis but also be ready to thrive in the future,” says Na Boon Chong, MD and Partner – Human Capital, Southeast Asia, Aon. “Redesigning EVPs tailored for the future of work will need data-driven and actionable insights into current employees, build workforce agility and resilience, and identify relevant stakeholders to bring along on the journey.”
Building the central intelligence of workforce analytics
By building a central intelligence of workforce data, layering in market intelligence, and engaging employees in the process, Bentley says businesses can gain transparency on the complexity and interconnected nature of the workforce. “This nerve center within an organisation can examine the hidden interconnectivities of data and creates patterns out of monolithic data sets,” he explains.
Various seemingly unconnected issues combine to impact a business: industry or business trends, the capabilities needed by an organisation at this time and those that need to be phased out need to be matched with data on employee costs, demographics, skill sets, and preferences.
There are also questions on the expense base, including compensation and benefits, real estate, information technology, and employee productivity-related expenses. These are further complemented with detailed analyses of jobs, evolving skills, and regulatory and shareholder requirements to make a framework for workforce design truly come alive.
When a business layers all these considerations along with preference-related analyses, there is a genuine breakthrough in EVP. The clear outcome is a workforce plan with various alternatives embedded in it, such as benefits, incentive plans, workplace arrangements, assessment and development, and career paths.
A nuanced approach that considers the butterfly effect of each data set will allow organisations to balance customers, shareholders, regulators, and community with employees and employee needs. The Future of Work, is in essence, about building a workplace that enables people to be the best version of themselves and drive better business outcomes.
A version of this article was first published on The Edge.