WORKFORCE MANAGEMENT The essentials of workforce planning Aligning workforce planning with core business strategies is more critical today than ever before. In fact, on average, 70% of a company’s operational budget is spent on labor, according to Bureau of Labor Statistics. Today, external factors like business volatility, changing workforce dynamics, and the disruptive nature of technological advances significantly complicate how you manage your workforce short and long-term for optimum business value. Internal shortcomings, such as the inability to effectively analyze and learn from existing employee-related data contribute to the challenge. In this paper we discuss best practices that can help companies strategically align workforce planning and core business strategy for improved performance, better business results, and reduced labor costs.

“Creating the future workforce—now—is the responsibility of the very highest levels of any organization because of the complexity and the urgency of the challenge.”

Accenture analysts Ellyn Shook and Mark Knickrehm

Perspectives: The essentials of workforce planning 1 Workforce planning: Why it’s more The extraordinary dynamics in today’s important today than ever economic, political, technological, Volatility has long been a major challenge for businesses and social trends make it difficult to in all major industries. Most companies grapple with correctly answer fundamental workforce developing a long-term business strategy that can foresee planning questions. specific ways in which unpredictable changes will impact business performance. They also struggle with creating the operational flexibility they need to respond in ways that Experts agree. According to , “Strategic workforce contribute to sustained business success. planning finally empowers companies to operationalize Workforce planning has a critical role to play in helping predictions of changing workforce supply to shape the companies develop the short- and long-term business future of work. There’s no delivering the business strategy strategy they need to succeed, and in institutionalizing the without it—and definitely no competing as a digital business operational flexibility necessary to effectively implement without it.”1 that strategy.

The extraordinary dynamics in today’s economic, political, What stands in the way: technological, and social trends make it difficult to correctly ■ answer fundamental workforce planning questions. Workforce information systems that aren’t integrated with Fortunately, there are best practices companies can adopt to other parts of the business. In a global survey of 7,600 mitigate risk and make sure their workforce is positioned for business executives and their staff, found that 91% future business requirements. In this paper we offer four best believed the data critical to answering the most pressing practices in workforce planning to consider. Let’s take a talent questions was more apt to reside in marketing and 2 closer look. financial management systems. ■ Tactical, short-term approaches to workforce planning.

■ Poor understanding of major trends in employer-employee Essential #1: Tightly link workforce relationships and how best to manage in the new paradigm. planning to core business strategy has found that most non-traditional workers are and objectives managed tactically, often by the procurement department. In the research firm’s “2018 Global Human Capital Trends” In many companies, workforce management is home to one report, Deloitte found that only 29% of the 11,000 of the last remaining operational silos in dire need of being respondents said they track non-traditional workers’ broken down and integrated into core business operations. compliance with work contracts and only 32% track their Whether it’s the sole silo left or not, current and future quality of work.3 business demands require that you fully integrate and tightly align labor—and more specifically workforce planning—with the core of the business.

Perspectives: The essentials of workforce planning 2 What to do: While short-term workforce execution is instrumental in helping your company meet its quarter-by-quarter objectives, ■ Implement a solution that easily and seamlessly informs the workforce planning must take a longer view and incorporate executive suite and other key planning and operations ongoing changes in skills requirements and the availability of leaders of relevant workforce data. labor to meet those requirements. ■ Make sure the data exchange goes both ways Workforce planning is a dynamic business process. As such, it so operational data informs workforce planning should be updated continuously. decision makers.

■ Strategically analyze trends in employer-employee relationships and incorporate the insights you gain into your What stands in the way: core business strategy. When asked by Deloitte to forecast ■ An ingrained approach to workforce planning that for all the makeup of their workforce in 2020, 37% of the more practical purposes is tactical. According to KPMG’s 2018 than 11,000 survey respondents expected a rise in CEO Outlook, CEOs are (typically just) focused on contractors, 33% foresaw an increase in freelancers, and prioritizing the importance of urgently needed skills, but 28% expected growth in gig workers.4 they also must think about long-term development of the workforce.7 ■ Make workforce planning executives full partners on the team developing your company’s long-term ■ The lack of a clearly defined workforce plan that establishes business strategy. the right metrics and level of detail required to inform your business strategy at varying times in the future.

■ The lack of supporting technical infrastructure that can Essential #2: Align short-term and deliver consistent and evolving insights into what workforce long-term workforce planning the business will need at varying times in the future. No doubt your business strategy looks to the future in multiple time frames. So should your workforce plan. Businesses What to do: operate in an environment of constant change and much of ■ Establish clearly defined time frames for your workforce this change is directly applicable to your workforce. plan and establish the metrics and level of detail you need Skills requirements are changing. There is a looming for each. mismatch between the skills a company has now and what ■ Use the same workforce planning methodologies for all they will need in the future. To put it in perspective: 60% of relevant time frames so updates to your plan are ongoing the jobs in the 21st century require skills possessed by only and seamless. 20% of the workforce.5 ■ Take the long view of what you will need to ensure The attributes and expectations of the talent pool are long-term workforce planning keeps your company in changing. At 34% today, millennials are already the largest compliance with requirements, such as collective bargaining group in the workforce and in a decade will make up 75%. agreements and fair scheduling legislation. Meanwhile, Generation Z, people born in 1995 or later and the world’s first true digital natives, are starting to enter the ■ Stay informed of business, regulatory, political, and social workforce. According to the Accenture Workers Value Index, trends so you have insights into how workforce emotional factors like engagement, quality of life, and status requirements and availability may change. are equally if not more important to workers than income and benefits.6

Perspectives: The essentials of workforce planning 3 Essential #3: One global manufacturing company has developed a Demand precision in your capacity best-practices approach to planning capacity that enables requirements planning the company to take historical data, business context data, Successful businesses invariably have a precise plan for and the required employee attributes to plan for spikes in near-term capacity requirements. But often a few quarters business demand two years in advance. or a year out, things get a little fuzzy. In a best practices ■ Streamline onboarding so it is virtually instantaneous approach to workforce planning, your company develops and other workforce execution processes so they are ways to project farther into the future what types of skills you equally efficient. need, at what levels, and at what locations. It’s a little like ■ Be mindful of employee engagement preferences, but don’t getting better at what you do now at a short-term tactical let it dominate strategic workforce planning thinking. level. But it requires improved business processes and supporting technology. Essential #4: Get the most out of What stands in the way: your data ■ A limited understanding of long-term external trends, such In most enterprises, workforce data is plentiful, but not as evolving skills requirement and how they could impact leveraged effectively. There is widespread acknowledgement business operations. that workforce related data analytics is critical to solving this ■ Business processes that can’t project labor requirements problem. Eight-four percent of respondents in the 2018 based on seasonal demand, production requirements, Deloitte Global Human Capital Trends survey said they view adherence to labor laws and other compliance people analytics as important, or very important, making it the requirements, and customer service standards. second highest ranked in terms of importance.8

■ An IT infrastructure that can’t support what-if scenario In a best practices approach, you develop a detailed analysis for long-term workforce planning considerations. understanding of what workforce-related data you have and how to apply to your core business planning. What to do: What stands in the way: ■ Implement new IT capabilities in analytics, artificial intelligence (AI), and how to effectively integrate the Internet ■ Lack of the basic analytical capabilities to leverage of Things (IOT) into core workforce planning. workforce-related data.

■ Develop business processes to support developing a ■ Lack of executive and technical capabilities proficient in more granular analysis of projected labor capacity using analytics. Deloitte found in a 2017 survey of 1,500 requirements. Go beyond projecting gross numbers of what senior executives that only 17% were familiar with the skills you will need, where and when. Address things like concept of A.I. and its applications at their companies.9

the tradeoff between training vs. hiring new skills, and how ■ Executives who don’t trust the data when it conflicts with to best use permanent employees, contract employees, preconceived notions. Seventy-eight percent of CEOs and outsource labor. surveyed for KPMG’s 2018 CEO outlook said that when making decisions they overlooked data-driven insights when they were contrary to their experiences.10

■ The inability to integrate workforce planning data into core enterprise resource planning systems to align labor with production.

Perspectives: The essentials of workforce planning 4 What to do: How to optimize workforce planning: ■ Take an inventory of workforce data you already capture Learn, adopt, adapt and store. Any good workforce plan undergoes constant change. It is ■ Develop the workforce-related information metrics you continuously updated to address new demands. But too often need to address critical operational success factors. the lessons learned from the outcomes of previous iterations ■ Upgrade your technology infrastructure to fill gaps in data are lost. Knowledge of successes and failures of the recent collection, storage, and analysis. past can be a rich source of guidance for the future.

■ Use artificial intelligence and other analytics tools to There is one common critical success factor in the four determine the gaps in what information you need and what workforce planning imperatives we’ve highlighted in this you have. paper. That’s the need to formalize a feedback loop for all aspects of your workforce planning so you can systematically ■ Develop processes for ongoing analysis to project what evaluate past experiences with future requirements in mind. skills you will need, how they compare to what you have at Once you have this feedback loop, you will need to decisively present, and how best to meet long-term workforce discard what hasn’t worked after carefully analyzing and requirements. “A.I. can streamline the process (for managing learning from the reasons it failed. talent) by predicting the skills that will be needed and monitoring individual contributions and productivity. With A.I. In their “Harnessing Revolution: Creating the Future doing the heavy lifting, HR can focus on talent strategy, Workforce” report, Accenture analysts Ellyn Shook and Mark facilitating people decisions, and coordinating supply and Knickrehm aptly summed up the importance of strategic demand,” according to the 2018 Global Talent Trends Study workforce planning. “Leaders need to leverage every by Mercer.11 advantage at their disposal—including one which risks being overlooked as companies focus on technology investment: ■ Be clear about the potential—and limitations—of technology ensuring people are relevant and adaptable to rise to the and the critical role that human expertise plays in getting challenge of this new revolution. If this sounds like an HR the most value from your IT investment. Accenture in its issue—don’t be fooled. Creating the future strategic workforce planning report says, “Both humans and workforce—now—is the responsibility of the very highest machines have their own role in the success of prescriptive levels of an organization because of the complexity and the analytics simulation models. Together they bring the urgency of the challenge and opportunity.”13 strength and the sophistication that elevate strategic workforce planning. Advanced customizable, flexible and scalable analytics platforms can help the business visualize future demand and supply across an increasingly liquid workforce of humans and machines… At the same time, humans have nuanced judgment that machines lack. That is why people identify input variables, configure , define algorithms, evaluate simulation outcomes, determine alternate scenarios, and implement organizational changes to align future supply with projected demand.”12

Perspectives: The essentials of workforce planning 5 Get to know Workforce Planning Infor® Workforce Planning, part of the Infor WFM suite, is a solution designed to meet the current and future demands of strategic workforce planning. It can vastly improve the way human resources planning is integrated into a company’s overall business strategy. The solution includes features to streamline how workforce budgets are created and managed to reduce costs, time, and errors. Infor Workforce Planning uses historical performance, standards and productivity factors to create a bottom-up labor budget that is tightly linked to forecasted business demand. The solution also streamlines how companies manage their workforce budget, so it stays closely linked to future and near-term business requirements.

1 Rouven Fuchs and Yaarit Silverstone, “Strategic Workforce Planning finally gets Strategic,” Accenture, 2016. Page 9. 2 “2018 Global Talent Trends Study: Unlocking Growth in the Human Age,” Mercer, 2018. Page 25, https://www.mercer.com/our-thinking/career/global-talent-hr-trends.html 3 Dimple Agarwal, Josh Bersin, Gaurav Lahiri, Jeff Schwartz, Erica Volini, “Introduction: The rise of the social enterprise 2018 Global Human Capital Trends” Deloitte Insights, March 28, 2018. Page 26. 4 Ibid. page 7. 5 “Strategic Workforce Planning,” Williams HR Consulting, 2017. Page 3. (On Human Resources Professionals Association (HRPA) of Canada.). 6 Ellyn Shook and Mark Knickrehm, “Harnessing Revolution: Creating the Future Workforce,” 2017, Page 12. 7 “Growing Pains: 2018 US CEO Outlook,” KPMG, 2018. Page 1. 8 Dimple Agarwal, Josh Bersin, Guarav Lahir, Jeff Schwartz, and Erica Volini, “The Rise of the Social Enterprise. 2018 Deloitte Human Capital Trends,” Deloitte Insights. 2018. Page 89. 9 Ibid. page 73. 10 “Growing Pains: 2018 US CEO Outlook,” KPMG, 2018. Page 5. 11 “2018 Global Talent Trends Study: Unlocking Growth in the Human Age,” Mercer, 2018. Page 23. 12 Rouven Fuchs and Yaarit Silverstone, “Strategic Workforce Planning finally gets Strategic,” Accenture, 2016. Page 6. 13 Ellyn Shook and Mark Knickrehm, “Harnessing Revolution: Creating the Future Learn more › Workforce,” 2017.

Infor builds business software for specific industries in the cloud. With 16,500 employees and over 90,000 customers in more than 170 countries, Infor software is designed for progress. To learn more, please visit Follow us: t f l www.infor.com.

Copyright ©2018 Infor. All rights reserved. The word and design marks set forth herein are trademarks and/or registered trademarks of Infor and/or related affiliates and subsidiaries. All other trademarks listed herein are the property of their respective owners. www.infor.com. 641 Avenue of the Americas, , NY 10011

INF-2038109-en-US-0818-1