This is the ninth in a ten-part series on Skills-based talent.
Today’s blog explores the implications and challenges of implementing a skills-based talent strategy on Workforce Planning.
Skills-based Workforce Planning
Skills-based workforce planning focuses on aligning an organization’s workforce with the specific skills and competencies required to meet its long-term objectives. The approach involves determining the gap between the skills needed to support the organization’s future business goals (through strategic planning and market-based skills sensing) and the current workforce’s capabilities resulting from internal skills-based assessment and reporting. It then involves developing a strategic plan to source those skills (through acquisition, up/re-skilling, alliances, or contracting), develop those skills (through L&D, resource management, career, and performance management), and retain those skills through leadership development, succession planning, compensation and rewards structures, and other elements of talent management.
Implications of Skills-based Workforce Planning
- Agility in Workforce Planning: A skills-based organization can respond more swiftly to changing market demands and new business opportunities. With a well-documented employee skills inventory or taxonomy, the organization can identify skill shortages and surpluses, enabling better workforce planning and talent-sourcing strategies.
- Resource Planning for Future Needs: Resource managers can proactively plan for future skill requirements by identifying emerging skills and industry trends. They consider various scenarios, such as technological advancements or industry disruptions, to assess their potential impact on skill requirements. This helps the organization prepare for different futures and is well-prepared for upcoming challenges and opportunities.
- Skill Forecasting: Instead of merely projecting the number of employees needed, workforce planning in a skills-based organization involves forecasting the demand for specific skills in the future. Forecasting relies on data analytics to identify skill trends, measure the effectiveness of skill development initiatives, and make informed decisions about talent management. This helps identify critical skill shortages or surpluses that may impact the organization’s success. The organization continuously monitors the skills landscape, business environment, and industry trends to adapt its plans as needed. Reporting on skills provides decision-makers with crucial data to make informed decisions regarding skills development initiatives.
- Agile Job Design: Job roles are designed with flexibility in mind. Workforce planning considers how roles can be adapted to leverage the diverse skill sets of employees and meet changing business needs. This often involves examining workforce and service delivery models to optimize the focus and organization of different talent pools to support various business processes.
- Career Mobility and Flexibility: Career paths may change or diversify with more agile job design. Employees may have more options to explore different career paths based on their skills and interests rather than being restricted to traditional job hierarchies. Ongoing performance assessments that evaluate how well employees utilize their skills and contribute to the organization’s goals may also influence staffing decisions. These developments can enhance career mobility, open up new possibilities for advancement, nurture employee loyalty, and reduce the need for external hiring.
- Workforce Diversity and Inclusion: A skills-based approach can foster a more inclusive workforce, as the organization values diverse skill sets and experiences, regardless of traditional backgrounds. The organization’s assessment and advancement of skills, now decoupled from tenure or degrees, open up new talent pools and possibilities for development not strictly tied to an ever-dwindling hierarchy of job openings.
Challenges of Skills-based Workforce Planning
- Skills Sensing: Despite recognizing the importance of upskilling, leaders face significant challenges in identifying the specific skills that will be needed. From our conversations, leaders struggle to predict skills gaps and emerging skills of the future. Identifying skill gaps within the organization can be challenging, especially when the business landscape is rapidly changing. Continuous monitoring and analysis are required to stay ahead of evolving skill requirements.
- Difficulty in Benchmarking Skills: Standardizing and benchmarking skills across industries, geographies, and roles can be challenging, making comparing skills across employees, lines of business, or business units harder. Even standardizing skills across offices can be difficult, as large offices often engender more specialization in their talent pools. In contrast, smaller offices often require more generalization and agility to cover their business needs with fewer people.
- Skill Gaps & Skill Obsolescence: Skill requirements change over time due to shifts in the business environment or technological advancements. The organization must continuously adapt its skill development strategies to match evolving future needs and facilitate reskilling or upskilling initiatives. Large-scale L&D initiatives, which take months to develop and deploy, come under ever more pressure to be faster, more agile, and more personalized.
- Data Privacy and Security: Gathering and analyzing data on employees’ skills may raise data privacy and security concerns. The organization must adhere to ethical practices and protect employee data.
- Balancing Specialization and Versatility: While specialized skills are essential for specific roles, the organization must also strike a balance by fostering versatility in its employees to adapt to changing demands.
- Skills Reporting/Visibility: Systems, processes, data, and analytics that summarize current skills capability at an enterprise level must be developed as a baseline for determining workforce needs and gaps. Standardizing skill definitions across myriad uses and interpretations such that they can be rolled up to an enterprise level can be non-trivial. Keeping skills profile data up to date often requires significant investments in technology and change management to stay current. Creating skills reporting systems, processes, and analytics often requires a new capability for the organization.
Stay tuned for our last blog on the Implications of a Skills-based Talent Strategy – where we discuss St. Charles’ model for addressing the implications discussed so far.