These are the thoughts and takeaways from the latest Talent Think Tank (TTT) held on Tuesday 9th October 2012 hosted by ArcelorMittal’s Ali Gilani (Global Head of Resourcing), titled ‘Effective Strategic Workforce Planning to meet Long-term Business Goals’.
The following summary, written by the TTT partner Chemistry Group, has been prepared to reflect a segment of the discussion held amongst senior HR and Resourcing professionals from leading UK and other international businesses. Specific company details, experiences and examples have been omitted from this summary as all discussions are held under ‘Chatham House Rules’.
Delegates expressed a variety of motivations for attending the meeting, including the desire to gain some perspective on how other organisations approach strategic workforce planning, how it integrates with other business functions and how it might best be applied within their own organisational context without cultural dilution.
Mr Galani then gave a comprehensive presentation explaining what effective strategic workforce planning (SWP) means at ArcelorMittal and how it is implemented.
At ArcelorMittal, SWP is a business activity and tool thats purpose is to sustain the business and ensure its future success by ensuring the availability of the right talent in the right place at the right time to execute the company’s five year corporate strategy.
This is achieved via a four-step planning process with responsibility for each step being clearly assigned: to the executive leadership team to set the strategic direction in the five year corporate plan (step 1), senior management to forecast the implications for their business units with specific regard to the supply of and demand for talent (step 2), and HR to analyse the resulting gaps between forecast demand and supply (step 3) as well as provide stewardship, guidance, support and process-management in the development of the SWP output (step 4).
The demand-side forecasting in step 2 considers location-specific, zero-based demand by location and job-function, rather than considering the people already in the business. This forecast is then mapped against the current workforce in light of a series of assumptions about variables such as attrition and retirement.
SWP is therefore distinct from ‘resource planning’ in a number of ways; the time and forecast horizons are typically longer and involve the mitigation of risk rather than tactical plans for immediate execution, the focus is on critical roles and strategic capabilities rather than all roles and being an iterative, annual process, SWP results in a dynamic plan including assumptions and contingencies that consider a host of external, environmental factors including political, economic, social, technological, environmental and demographic issues. Examples discussed in the meeting included an ageing workforce, local/regional shortages of engineering graduates, rising unemployment and opportunities for process automation.
SWP at ArcelorMittal always considers four scenarios across a five-year time horizon: organizational growth, no-growth, contraction and crisis. This time-horizon enables the business to look across the anticipated peaks and troughs in business activity and consider the forecast supply and demand for core- and non-core skills and for a variable workforce over the medium-term.
These scenarios are considered on a site-by-site basis as local environmental factors differ sufficiently to render company-wide averages meaningless. As Mr Gilani put it during the meeting, such averages can suggest that: ‘If your head is in the freezer and your legs are in the oven, you’re OK!’
The resulting plan drives a host of other HR-related strategies in the business including staffing and recruitment, career development, succession planning, organisational alignment and job design, L&D and compensation.
SWP has evolved at ArcelorMittal from a ‘push’ activity to one where the ‘pull’ is coming from the CEOs of the various business units, and Mr Gilani attributed this success to a number of key lessons:
The process is ‘owned’ by the Executive leadership team – it is not an HR-led process
- Maintaining a focus on the bigger picture; failure to do so results in short-term budgeting endeavor rather than effective strategic planning to sustain the business
- Starting small and simple with a pilot site rather than trying to ‘run before you can walk’, which becomes rapidly overwhelming. Mr Gilani’s experience is that is typically takes 3-4 cycles of SWP activity to learn how to do it well
- Talking the language of the Board: SWP is a rare opportunity for HR leadership to partner with the business and so build its credibility as a value-adding business function. To do so requires that it provide the Board with options expressed using ‘business hooks’ the Board will recognize and respect – including finance and business advantage related to the strategic direction and requirements of the business. It is for the Board to then challenge and choose between the options presented
- Successful implementation: a strategic plan is useless if it remains just that
- Recognising the blend of skills required to deliver a successful SWP process – an example discussed in the meeting was the blend of data analytics and understanding of the HR function that can sometimes be found in financial controllers who have spent three to four years in HR.
Mr Gilani closed his presentation with a call to the attendees at TTT to take the initiative in the field of SWP; or accept the certainty that someone else will, reducing HR to managing day to day operations.
Mr Gilani’s presentation prompted subsequent discussion of a number of themes by those present, including:
The value of learning agility as a key leadership attribute in response to increasing levels of uncertainty in the business environment and hence in scenario planning
- Changing workforce demographics and the possible impacts of associated values and motivations, especially amongst younger workers
- Which external consultants have the expertise to genuinely facilitate SWP?
- If and how qualitative and cultural factors can be built into effective SWP and the resulting succession plans; with delegates citing examples of organisations that prioritise cultural fit above competence in candidate assessment
- How to manage lateral hires and the progression of key talent when faced with business unit heads’ reluctance to release their best people. Mr Gilani explained that at ArcelorMittal, key performers are ‘attached’ to the corporate body rather than verticals (or individual fiefdoms), and that verticals cannot hire for senior roles without corporate involvement
- How to support leaders and managers to maintain a medium-term perspective when faced with such a negative short-term economic outlook
- Cultural barriers to change and performance management – an example was cited of a Japanese parent whose societal values were cascading through the organisation and inhibiting both objective performance appraisal of existing staff and the integration of a new profile of sales professionals
- The scarcity of sources of insight into HR data analytics – two that were cited were Roffey Park and Henley Business School
The Talent Think Tank will meet again on 7th November at RSA to discuss how to engage and develop senior talent in uncertain times, with a particular focus on the next steps for executive education. For more information on this event please visit: www.hrttt.eventbrite.com