Too few companies are thinking about right skills, peopleQ. I am the VP of Engineering for a fast growing start-up technology company. Our headcount has grown from 50 to 300 employees over the past two years and we’re on target to double in size over the next three years. The majority of our hiring is in technology and engineering. Our CEO is recommending that we hire a consultant to conduct a Strategic Workforce Plan. This will require my time along with other directors and VP’s for input. What are the actual benefits of going through this process?

A. Congratulations to you and the organization for your recent success. According to Human Capital Institute’s course on Strategic Workforce Planning dated 2010, SWP is one of the most important topics for the new economy. Without the proper preparation, organizations will be inundated with unanticipated changes and challenges.

While organizations cannot predict the future, they can prepare for it. CEOs should be interested in improving their company’s readiness and agility. The phrase of “seeing around corners” is a great way to describe the importance of strategic workforce planning.

According to the authors of The Differentiated Workforce, “building competitive advantage requires the right workforce strategy, but that doesn’t mean simply putting people first. It means putting strategy first and developing a workforce that executes that strategy.” An often heard phrase is “people are our most important assets.” Jim Collins, author, said: “It is the right people that are the most important assets.”

Strategic workforce planning is an underdeveloped practice in most ’Talent Age” organizations. This stems from the fact that talent management has not been viewed as a strategic process but rather as administrative and operational activities. While this may have been true in the Industrial Age, it is not in the Talent Age.

Most businesses have no talent plans at all, and will be impacted greatly by retirements, downsizing and other external and internal factors. One of the most difficult aspects of workforce planning is predicting future skills needed, which is the art of strategic workforce planning. There is a great opportunity for organizations to do workforce planning right and for it to make a vital difference in the present and future success of the organization.

The context today highlights impending retirements, five workplace generations, new skills, jobs that weren’t imagined a decade ago, and career mobility. Individuals are seeking flexibility and greater options as they weight their personal and professional obligations.

Nowhere is this change more evident than with firms where much of their revenue comes from products that did not exist a year ago. The pace of change is great and the organizations that can adapt quickly are the winners.

70 percent of organizations have a weak pipeline. Cost per day when operating without a key player - $7,000.

Cost of a poor hire - $300,000 to $500,000.

Rate of efficiency at which most businesses operate because of poor engagement levels – 30 percent.

Average time required for a new manager to become productive – 6 months.

Percentage of a company’s employees who are well suited for their roles – 20 percent.

Loss of talented engineers or leaders range from $250,000 to $500,000. Cisco loses $250,000 for each talented engineer it loses. Bristol Meyers Squibb loses $500,000 for each senior leader lost.

The value of top performers is at least two times that of average employees.

The purpose of a strategic workforce plan is to define and optimize the workforce that can execute the organization’s strategy, both today and in the future. The following are key questions that should be answered:

What are the impacts of demographic shifts and external factors?

What new roles and competencies are needed in the workforce?

What is the gap between talent supply and demand?

What is the balance between build, buy and borrow talent to close gaps?

How can we ensure that the right people are in the right jobs with the right skills at the right time for the right cost?

Workforce planning is all about having the workforce needed to execute the company’s strategy.


Jennifer Laxton is the CEO, Executive Coach and Strategic Workforce Planner with ESA in Santa Rosa www.esa.com. ESA is an executive search and consulting company. You can reach her at 707-217-4535 or jklaxton@esa.com.