Talent

Human Resources: "Right" Sizing

Nov. 10, 2006

Strategic workforce planning promises better cost control and better business decisions.

With its world headquarters close to the Finger Lakes, high-tech manufacturer Corning Inc. seems pointed in the right direction.

Based in the upstate New York town of the same name, Corning is among a growing number of companies turning to strategic workforce planning, a relatively new management process that analyzes and forecasts the talent companies need to execute their business strategies. The process aims at helping companies put the right people in the right places at the right time at the right prices, according to the Conference Board, a New York-based business research group. The process can help companies control labor costs, assess talent needs and make better business decisions, from locating new facilities to calculating the cost effectiveness of adding to full-time payrolls, notes the Conference Board.

In addition to Corning, manufacturers employing strategic workforce planning include Dow Chemical Co., IBM Corp. and Hewlett Packard Co.

At Corning the process in its current form has been in place for three years, is dubbed human capital planning and, among other things, figured prominently in a decision to source locally in China.

"We use human capital planning to look at our workforce as a portfolio," relates Matthew Brush, director of human capital planning at Corning. In practice, "if you do [the] portfolio process right," it means investing less in employees in one segment of the business while freeing up resources to add workers or deepen their skills in a part of the business that promises to produce greater strategic impact, explains Brush. "There are not infinite resources, [and] that's very hard for companies to acknowledge, especially when it comes to people."

Strategic workforce planning is not a new name for some old practice, emphasizes Mary B. Young, a senior researcher at the Conference Board. Strategic workforce planning, for example, assumes the business environment is constantly changing. It includes, she notes, asking such questions as, "What if the price of oil drops?" or "What if the Democrats win the election?" What's more, "you can look at the differences between different operating businesses, or different locations or even under different managers," she says.

In contrast, workforce planning of the past has often focused simply on headcount and produced a static projection of the number of people likely to be needed sometime in the future, Young says. "Too often, the net result was a humongous report, blinding spreadsheets and a dizzying amount of data that provided very little value to the business."

Strategic workforce planning is new enough that Young doesn't have a reliable count of companies using it. Clearly, however, maintaining consistency of data is one of the biggest challenges companies face in implementing strategic workforce planning. Everyone has to be counting the same thing in the same way, whether that's employee demographics, costs, revenues or customer satisfaction. "The numbers need to be consistent to be credible and reliable," she says. "As soon as business leaders discover [a number is] not right, they dismiss the whole [exercise]."

How To Implement Strategic Workforce Planning

Build on previous successes, such as succession planning, or try a pilot program in a specific business unit.
Seek functional partners within the company, for example, HR collaborating with finance or IT.
Establish definitive and consistent data.
Create a common language to describe competencies, jobs and other workforce data.
Regularly update skills and competency data.
Adapt workforce planning to different needs and dynamics.
Make the process and tools simple and user-friendly.
Develop HR's capabilities to make it an effective partner.
Focus on the most critical, high-impact jobs and talent.
Use strategic workforce planning to leverage internal talent.
Integrate strategic workforce planning with business planning.
Hold business units accountable.

Source: The Conference Board.

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About the Author

John McClenahen | Former Senior Editor, IndustryWeek

John S. McClenahen, is an occasional essayist on the Web site of IndustryWeek, the executive management publication from which he retired in 2006. He began his journalism career as a broadcast journalist at Westinghouse Broadcasting’s KYW in Cleveland, Ohio. In May 1967, he joined Penton Media Inc. in Cleveland and in September 1967 was transferred to Washington, DC, the base from which for nearly 40 years he wrote primarily about national and international economics and politics, and corporate social responsibility.

      McClenahen, a native of Ohio now residing in Maryland, is an award-winning writer and photographer. He is the author of three books of poetry, most recently An Unexpected Poet (2013), and several books of photographs, including Black, White, and Shades of Grey (2014). He also is the author of a children’s book, Henry at His Beach (2014).

      His photograph “Provincetown: Fog Rising 2004” was selected for the Smithsonian Institution’s 2011 juried exhibition Artists at Work and displayed in the S. Dillon Ripley Center at the Smithsonian Institution in Washington, D.C., from June until October 2011. Five of his photographs are in the collection of St. Lawrence University and displayed on campus in Canton, New York.

      John McClenahen’s essay “Incorporating America: Whitman in Context” was designated one of the five best works published in The Journal of Graduate Liberal Studies during the twelve-year editorship of R. Barry Leavis of Rollins College. John McClenahen’s several journalism prizes include the coveted Jesse H. Neal Award. He also is the author of the commemorative poem “Upon 50 Years,” celebrating the fiftieth anniversary of the founding of Wolfson College Cambridge, and appearing in “The Wolfson Review.”

      John McClenahen received a B.A. (English with a minor in government) from St. Lawrence University, an M.A., (English) from Western Reserve University, and a Master of Arts in Liberal Studies from Georgetown University, where he also pursued doctoral studies. At St. Lawrence University, he was elected to academic honor societies in English and government and to Omicron Delta Kappa, the University’s highest undergraduate honor. John McClenahen was a participant in the 32nd Annual Wharton Seminars for Journalists at the Wharton School at the University of Pennsylvania in Philadelphia. During the Easter Term of the 1986 academic year, John McClenahen was the first American to hold a prestigious Press Fellowship at Wolfson College, Cambridge, in the United Kingdom.

      John McClenahen has served on the Editorial Board of Confluence: The Journal of Graduate Liberal Studies and was co-founder and first editor of Liberal Studies at Georgetown. He has been a volunteer researcher on the William Steinway Diary Project at the Smithsonian Institution, Washington, D.C., and has been an assistant professorial lecturer at The George Washington University in Washington, D.C.