Integrating Contingent Labour into Strategic Workforce Planning

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1 Wednesday, 16 May 09:45 Nine Kings D Concurrent Session: Advanced Practitioner Track Integrating Contingent Labour into Strategic Workforce Planning Moderator: Barry Asin, President, Staffing Industry Analysts Panellists: Mary B Young, DBA, Principal Researcher, Human Capital, The Conference Board Roger Clements, Commercial Director, Advantage xpo 2012 Crain Communications Inc

2 Workforce Planning Seldom Incorporates Contingent Labour 2012 Crain Communications Inc

3 Workforce Planning Seldom Incorporates Contingent Labour 2012 Crain Communications Inc

4 Workforce Planning Seldom Incorporates Contingent Labour 2012 Crain Communications Inc

5 Dr. Mary Young Principal Researcher The Conference Board Strategic Workforce Planning: Highlights from Conference Board Research 5

6 Overview Strategic Workforce Planning (SWP) in Action The Intersection of SWP and Contingent Staffing Company examples Where Are Companies Today? 6

7 Strategic Workforce Planning connects HR strategy and practices to business strategy to ensure the company has the right people in the right place at the right time and at the right cost. 7

8 SWP Provides a Formal, Systematic Process for Connecting Business Strategy with HR Strategy and HR Practices Business Strategy HR Practices SWP HR Strategy 8

9 Operational Workforce Planning Projected Demand Projected Demand - Projected Supply - Gap Projected Supply Plan Gap Plan 9

10 Enhancements to Workforce Planning: Analytics Finance Engineering Operations Research Projected Demand - Projected Supply Gap Plan Workforce Analytics 10

11 Age Profile of Workforce: Company vs. Region Company s Average Retirement Age = 60.4 Key: Diamond markers indicate the average age of 3M employees by specific area. 11

12 Enhancements to Workforce Planning: Scenarios Strategic Planning, Budgeting Projected Demand - Projected Supply Gap Plan Modeling Alternatives, Forecasting 12

13 Scenario Planning at UBS (China) Scenario A: Based on our current business plan, here s the workforce plan that ensures we will have the talent needed to execute that plan. Scenario B: In a bull market, how will business plan change? How would workforce plans need to change? What is the financial benchmark indicating we ve moved from A to B? Scenario C: In a bear market, how will our workforce plans need to change? What is the financial benchmark indicating we ve moved from A to C? Source: Mary Young, Strategic Workforce Planning in Global Organizations, The Conference Board,

14 Enhancements to Workforce Planning: Segmentation Marketing Projected Demand - Projected Supply Gap Plan Workforce or Role Segmentation 14

15 Enhancements to Workforce Planning: Segmentation Marketing Projected Demand - Projected Supply Gap Plan Workforce or Role Segmentation 15

16 Workforce Segmentation: Corning Roles that impact the strategy Strategic Critical to driving long-term competitive advantage, with specialized skills or knowledge TALENT SEGMENT AND VALUE Core The Engine of the Enterprise, unique to the company and core to delivering on its products and/or services Build Protect Roles impacted by the strategy Requisite Cannot do without, but whose value could be delivered through alternative staffing strategies (other than full-time headcount) Non-Core Talent whose skill sets no longer align with the company s strategic direction Streamline/ Outsource Redirect 16

17 Operational vs. Strategic Workforce Planning Operational Purpose: Forecast short-term headcount Focus on detail & precision Output: headcount & staffing plans Planning period: 6 mos. 2 yrs. Built on one set of assumptions (single scenario) Strategic Purpose: Produce information & insights to support strategic business decisions Focus: Dialogue w/ senior execs re Business strategy Workforce implications ID critical roles, skills Integrated with business and budget planning Output: directional numbers Longer planning period: 2-5 yrs. Multiple scenarios considered 17

18 Why Operational Workforce Planning Isn t Enough Uncertainty about the future 3-5 years from now Talent scarcity necessitates longer term strategy Changes in markets, products, services, technology, etc. create different talent demand (skills, knowledge, locations, jobs, numbers, etc.) Organizations that can respond rapidly and effectively to change have a competitive advantage over others. Assess risks, opportunities, costs Optimize their use of talent 18

19 As SWP gains credibility and matures, it can become an input to Business Strategy, as well as an integrating process that drives HR Strategy and HR Practices Business Strategy HR Practices SWP SWP HR Strategy 19

20 The Pay-Off from SWP? Company Can Evaluate business scenarios based on more robust models Manage human capital risk Drive business results Prioritize human capital investments Leverage talent across lines of business and geographies Make smarter decisions to buy, build, borrow, or redeploy talent 20

21 The Intersection of SWP and Contingent Labor Strategies 21

22 By Linking SWP and Contingent Staffing Strategies, Companies Can Weigh the trade-off between short-term cost and longer-term capability requirements Capture total labor costs Manage contingent workforce as a visible component of their workforce strategy, talent scenarios, etc. Develop a governance process and decision tools to help leaders make optimal labor choices in the face of uncertainties 22

23 Company Examples 23

24 Staffing Industry Analysts Contingent Workforce Action Matrix Source: Staffing Industry Analysts, 24

25 Global Company s Decision Tool: To Own or Rent Talent? What is the duration of the work? Needed on an ongoing basis Needed for a defined duration What is the type of work? Drives a strategic competitive advantage Unique to the company, requires special or hard-to-find skills or knowledge Essential but could be delivered through alternative resource types Is the knowledge/experience gained from the work Are the transition costs (turnover, training, etc.) acceptable to the business? Critical to retain Unique and/or critical to retain Significant and not acceptable to the business Minimal and acceptable to the business 25

26 Rio Tinto s Contingent Workforce Risk Safety of record of contractors versus regular employees Contractor spend fragmentation (rate variation) 12 Monthly Rolling AIFR per 200,000 Hours Worked Rio Tinto Managed Operations 12 Month Rolling All Injury Frequency Rate for Employees and Contractors from Jan 02 to Jun 09 Spend Fragmentation Fragmentation of US services spend with active vendors in the last 12 months across Rio Tinto % of Spend % of Vendors # of Vendors 100% 100% % 22% % 13% % 9% % 7% Total Rolling AIFR Contractor Rolling AIFR Employee Rolling AIFR 26

27 Where Are Companies Today? 27

28 The Conference Board s SWP Maturity Model Dimension Early Middle Mature Reach Pilot project(s) Enterprise wide Key supply chain partners Planning Period mos. 2-3 years 3-5 years+ Who Drives? HR BUs w/ HR support Senior execs Scope All or critical jobs Selective focus on critical jobs/skills Prerequisites Critical business issue that SWP can address Integration w/ business planning, strategy Common taxonomy of jobs/skills Inputs Workforce data Business strategy Performance data External data Outputs & Outcomes Communication Workforce analytics, forecasts, action plans Push: HR/SWP deliver reports to business Alternative scenarios Mid-cycle report of plan vs. actuals Pull: BUs can generate own reports, models, scenarios Internal talent plus some external (contingent workers) Data and metrics re suppliers Data re external stakeholders (suppliers, contractors, JVs,etc.) Input to business strategy & planning Employee access to selected areas? 28 Source: Implementing Strategic Workforce Planning (2009), 19-25

29 SWP Resources from The Conference Board Publications Strategic Workforce Planning across National Borders (June 2012) Where Do SWP Leaders Come From? (2012) Strategic Workforce Planning from Micro to Macro (2011) Broadening the Base for SWP: The Value of Cross-Functional Partnerships (2011) Engaging Business Leaders in SWP: A Guide to Effective Conversations (2011) Strategic Workforce Planning Leaders Bookshelf (2011) Human Capital in Review: Focus on SWO (2011+) Strategic Workforce Planning Quarterly ( ) Managing Human Capital Risk (2011) Strategic Workforce Planning in Global Organizations (2009) Implementing Strategic Workforce Planning (2009) Gray Skies, Silver Linings: How Companies Are Forecasting, Managing and Recruiting the Mature Workforce (2007) Strategic Workforce Planning: Forecasting Human Capital Needs to Execute Business Strategy (2006) Councils European Council on Strategic Workforce Planning US Council on Strategic Workforce Planning 29

30 Size Strategic Workforce Planning Academy The Conference Board Strategic Workforce Planning Academy helps participants develop practitioner-identified competencies and refine their SWP efforts, aided by peers and seasoned strategic workforce planning leaders. Up to 18 participants Meetings 2 in-person meetings in Brussels: June 28-29; Sept interactive webcasts on member-selected topics Expert Resources From The Conference Board: Stacy Chapman, Program Director and Senior Fellow Dr. Mary Young, Principal Researcher, Human Capital Peer Learning Learning Coaches Certificate Leading SWP Practitioners: James Gallman, GE Angela Sheffield, Applied Materials Thorsten Dietz, Allianz Dave Sutherland, CH2M HILL Theresa Brett, UNC Health Systems Collaborative knowledge-sharing among participating companies SWP experts serve as one-on-one coaches and mentors to participants SWP Academy certificate from The Conference Board For information: 30

31 Advantage xpo STRATEGIC WORKFORCE PLANNING A Service Providers Perspective A division of Advantage Resourcing Confidential & Proprietary. Not for distribution.

32 OVERVIEW Advantage xpo: Perspective Context The Role of the Service Provider in Strategic Workforce Planning Successful Application of Effective Workforce Planning A division of Advantage Resourcing Confidential & Proprietary. Not for distribution.

33 ADVANTAGE xpo Staffing Industry Leader $7 billion+ Revenue > 40 Years of Experience 3,000+ Clients Part of Recruit Co. The 4 th largest Staffing, Recruitment Process Outsourcing and Managed Service Company in the World Global Footprint 200+ US Offices 20+ Offices in EMEA 100+ Offices in APAC Advantage xpo is a recognised global market leader in the design, implementation and operational delivery of strategic staffing solutions and workforce management programmes. Through our work we pioneer leading edge approaches to contingent workforce management via managed service programmes (MSP) and deliver measurable process and output improvements in the delivery of recruitment process outsourcing (RPO). Talent Acquisition & Management Solutions Contingent Workforce Management Supplier Management Contractor Compliance Managed Service Programme Strategic Workforce Management Recruitment Process Outsourcing Full cycle RPO Partial cycle RPO Project Based or Volume Hires A division of Advantage Resourcing Confidential & Proprietary. Not for distribution.

34 DEVELOPING THE HUMAN CAPITAL PLAN ORGANISATIONAL CHALLENGE Organisations taking a strategic approach to workforce planning tend to follow a structured process requiring an appreciation and input from both internal and external factors. STRATEGIC BUSINESS AGENDA Organisational Profile Workforce Scenarios Current Workforce DNA GAP Analysis Key Issues Internal External Human Capital Action Plan Sector Developments / Labour Market Developments / Competitor Activity THE ROLE OF THE SERVICE PROVIDER Working in partnership with HR and Commercial functions to provide planning and execution support and to implement and manage target levels of workforce balance. Key question: where in this cycle can service providers provide benefit? A division of Advantage Resourcing Confidential & Proprietary. Not for distribution.

35 DEVELOPING THE PLAN: PARTNERSHIP WORKING STRATEGIC BUSINESS AGENDA Organisational Profile Workforce Scenarios Current Workforce DNA GAP Analysis Key Issues Internal External Human Capital Action Plan Sector Developments / Labour Market Developments / Competitor Activity SERVICE PROVIDER - Market Intelligence - Benchmarking - Employer Brand Proposition Feedback - Projected Resource Availability A division of Advantage Resourcing Confidential & Proprietary. Not for distribution.

36 DEVELOPING THE PLAN: PARTNERSHIP WORKING SERVICE PROVIDER - Scenario Modelling - Contingency Planning STRATEGIC BUSINESS AGENDA Organisational Profile Workforce Scenarios Current Workforce DNA GAP Analysis Key Issues Internal External Human Capital Action Plan Sector Developments / Labour Market Developments / Competitor Activity A division of Advantage Resourcing Confidential & Proprietary. Not for distribution.

37 DEVELOPING THE PLAN: PARTNERSHIP WORKING STRATEGIC BUSINESS AGENDA Organisational Profile Workforce Scenarios Current Workforce DNA SERVICE PROVIDER - External Resource Planning -Skills Transfer Mechanisms - Business Unit /Dep t Skills Analysis - Capability Benchmarking GAP Analysis Key Issues Internal External Human Capital Action Plan Sector Developments / Labour Market Developments / Competitor Activity A division of Advantage Resourcing Confidential & Proprietary. Not for distribution.

38 DEVELOPING THE PLAN: PARTNERSHIP WORKING STRATEGIC BUSINESS AGENDA Organisational Profile Workforce Scenarios Current Workforce DNA GAP Analysis SERVICE PROVIDER - Resource Availability - Compensation Policies - Employer Brand Challenges - Geographic / Regional Issues Key Issues Internal External Human Capital Action Plan Sector Developments / Labour Market Developments / Competitor Activity A division of Advantage Resourcing Confidential & Proprietary. Not for distribution.

39 DEVELOPING THE PLAN: PARTNERSHIP WORKING STRATEGIC BUSINESS AGENDA Organisational Profile Workforce Scenarios Current Workforce DNA GAP Analysis SERVICE PROVIDER - Strategic approach to workforce planning - Setting & management of optimum workforce balance - External Talent Attraction Campaigns - Development of talent pools / communities Key Issues Internal External Human Capital Action Plan Sector Developments / Labour Market Developments / Competitor Activity A division of Advantage Resourcing Confidential & Proprietary. Not for distribution.

40 ORGANISATION EXAMPLES Leading UK Retail Financial Services Provider Operate as a partner for planning near term and long term contingent resource. Focus on achieving flexibility and dynamic workforce. Regular Seasonal Peaks of resource planned to meet business cycle Leading UK Retail Financial Services Provider Managed Service partner delivering solution for contingent workforce across EMEA and Asia Pacific region. Project driven operating environment requiring strategic and tactical resource planning Leading UK Retail Financial Services Provider Managed Service partner delivering solution for contingent workforce across EMEA region. Project driven operating environment requiring strategic and tactical resource planning A division of Advantage Resourcing Confidential & Proprietary. Not for distribution.

41 Wednesday, 16 May 09:45 Nine Kings D Concurrent Session: Advanced Practitioner Track Integrating Contingent Labour into Strategic Workforce Planning Moderator: Barry Asin, President, Staffing Industry Analysts Panellists: Mary B Young, DBA, Principal Researcher, Human Capital, The Conference Board Roger Clements, Commercial Director, Advantage xpo 2012 Crain Communications Inc

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