November 27, 2018
Published: Journal of Accountancy
In a time of great disconnection in the workplace, scenario planning through analytics may be a key to success for organizations and their people.
The workplace disconnection arises because organizations are having difficulty finding enough skilled workers to fill their vacant positions, yet even the best employees are afraid of losing their jobs to automation or gig workers.
To keep key workers from leaving, employers are adding pingpong tables in their offices, offering free snacks, providing new benefits such as student loan repayment, and accommodating flexible hours and work-from-home arrangements.
What many employers haven’t done is perform a detailed, data-driven analysis of what their workforce will look like in the future as a result of technology advancements, workforce trends, and competition.
“Really defining what your future workforce model is based on all these scenarios … is the first thing they need to do,” said Bhushan Sethi, joint global leader for People and Organization for PwC US. “How they do that is going through scenario-planning exercises and taking positions and making assumptions. It’s back to good, basic planning.”
Scenario planning can help employers understand the jobs employees will hold in the future — and how to train people for those jobs. But a recent PwC survey of 1,246 business and human resources leaders from 79 countries shows the disconnection between company leaders’ values and the actions they have taken. The top 10 organizational objectives identified by these respondents included many people-focused items such as:
– Valuing, developing, and rewarding human skills such as leadership and creativity.
– The well-being of employees.
– Performance management that focuses on output, not hours.
– A collaborative environment.
– Work/life balance.
The lack of a comprehensive mechanism to bring these goals to fruition is leaving companies short of their goals, Sethi said.
“Many of our clients are still implementing HR technology, still implementing their HR programs, their performance management, et cetera,” Sethi said. “[They are] talking about reskilling and implementing some elements of reskilling, talking about changing their candidate experience, but there isn’t a cohesive plan to pull it all together.”
The PwC survey shows that companies are failing to incorporate data into their workforce planning. More than one-third (41%) of respondents said that while it’s important to use insights from big data and advanced analytics in workforce decision-making, their company is not taking action on that. Meanwhile, 34% said that even though it’s important, they are not using data analytics to predict and monitor skills gaps in their workforce.
Sethi said scenario planning is the key to putting in place a workforce that will be prepared for the future. He suggested that organizations go through their functions, lines of business, and regions (where applicable) and figure out how many full-time and contract people they will need, as well as how many bots they may embed into different processes.
Predictive analytics can help employers gauge their future talent needs, understand how to create compelling experiences for their people, and eliminate bias in selection, assignment, and appraisal of people, according to the PwC report.
Sethi said it’s important to communicate plans for the future to employees, customers, suppliers, service providers, and even regulators and the community as a whole. Where new technologies are involved, he said organizations should explain to customers that automation is being used to improve their experience and the business.
The final step from a people perspective, Sethi said, is to test human resources mechanisms to see if they support the company’s data-actualized vision for the future.
“If you’re investing in a new learning curriculum or a new learning management system, how does that actually help me get those soft skills we [need]?” Sethi said. “If you’re investing in a well-being program, have you really focused it on the employees that are most at risk? … It’s looking at every one of your HR programs to see if it fits the purpose.”
The scenario planning is the key to doing all of it right, according to Sethi. Many people are afraid of what technological innovation means for their jobs, and you can’t tell your people what that impact will be if you haven’t performed the forecasting to support a comprehensive plan for the future. Furthermore, you can’t reskill your workforce for the jobs of the future if you haven’t figured out what those jobs will entail.
Company finance departments have a critical role to play in this process, along with the human resources function.
“Finance and HR need to work together around integrated financial and workforce planning, scenarios, and how [they] impact headcount,” Sethi said. “[They] also impact cost, and those things are interrelated and come together in your budget.”
From a strategic perspective, finance personnel also have a handle on the data and forecasting techniques that can propel the organization to a better understanding of its needs for the future.
“We’re not using the power of the data analytics enough to make people-based decisions,” Sethi said, “whether it’s around planning for the workforce, whether it’s around who we hire, or how we reward.”