How staffing can become a strategic contributor
The greatest challenge facing HR and staffing functions in the not-too-distant future will be the large number of retirements. The looming wave of retiring baby boomers threatens to create major shortages in required skills and staffing levels.
Organizations should act now to identify critical shortages, define the impact and develop specific staffing and development plans in response.
Yet many companies seem to just spin their wheels — choosing to simply analyze problems at a “high level” rather than actually solving them. HR and staffing departments not only need to identify, prepare for and address coming retirement issues, but create staffing plans that drive action.
Traditional approaches not sufficient
When it comes to retirement analyses, most organizations conduct two different types. One is typically too general and the other, while more specific, is usually insufficient by itself.
Some organizations conduct broad studies of possible retirements. But because the findings are so general, they are difficult to act upon. Studies that identify retirement issues among a company’s entire workforce, for example, usually contain data summaries, combinations of jobs and data compilations that make it virtually impossible to define specific staffing plans.
If a study looks at all engineers across a unit, any staffing plans based on these findings are, by definition, for that combined group — engineers as a whole, not by discipline.
Other organizations include risk assessments arising from retirements as part of succession planning processes.
While often helpful, this approach is rarely sufficient. What about all the retirements in positions that are not included in the succession planning process? How will they be identified and addressed?
In addition, the focus of succession planning is usually on developing candidates. How often do those plans provide for the transfer of knowledge, experience and personal relationships from managers to candidates?
Finally, detailed analyses of retirement situations usually include attempts to precisely define retirement numbers. These focus on critical job categories, but fail to define what needs to be done to address the critical staffing issues.
These kinds of analyses just are not useful — but they are good examples of how the staffing function is missing an opportunity to make a strategic contribution.
The following practical suggestions might be useful for staffing functions looking to move beyond analysis and make a real strategic contribution to the organization.
One caution: Remember that “staffing” refers to all movement into, around and out of an organization. This includes, but is more than, recruiting. It also includes internal placement, redeployment, transfers and any other type of job change.
Define appropriate objectives at the start: Fully define the staffing actions required to address retirement issues. The objective is not to just analyse (or better define) retirement issues.
HR has done the “right” job when it develops specific solutions to the most critical problems, not just better definitions or a better understanding of what’s wrong.
Be specific, not generic: Many organizations develop broad analyses of retirement issues that span vastly different organization units, job categories, locations and employee demographics.
This analysis may seem important (or interesting) at first, but rarely does it produce results that a company can act on.
Is it really helpful to know that 22 per cent of senior management is slated to retire over the next five years? Can you really develop any plans to address a need as general as this?
Wouldn’t it be more helpful to define, for example, the specific staffing actions needed to address the needs that will arise when 40 per cent of the most experienced production staff retires in the next three years? What if the issue relates to the potential retirement of a senior marketing manager who is the “face of the company” for major customers? What if the head of labour relations has developed a long-standing trust of your union’s leaders?
What if there is a senior manufacturing leader who knows just where to “kick” the forging press when it begins to act up? What is being done to transfer this experience to others before the person retires?
Focus efforts and tailor plans to issues: Don’t try to solve all problems, especially not all at once. Instead, focus efforts on shortages that will be most critical and develop plans to address each issue. Here is an approach that works well:
•Define the percentage of employees in each job category who are eligible to retire in the next three to five years. Base the calculation on normal retirement “rules” (for example, age plus service equals 80 with a minimum of 10 years service).
•Consider segmenting the population by business unit or geography. Retirement rates often differ significantly due to company culture, climate and working conditions; take these differences into account.
•Identify jobs where the projected retirement percentage is 25 per cent or higher and develop quantitative staffing models for just these jobs.
This modelling process normally includes defining staffing requirements, forecasting future staff availability, calculating gaps and surpluses, developing strategies and defining specific staffing plans.
These models should include realistic assumptions about the number of retirements expected from each of the job categories.
•Identify job categories where losses may be few in number, but significant in impact: losses of key senior managers or experienced technical staff. For these jobs, create succession and development plans, not staffing models.
In addition, it might make sense to develop “knowledge transfer plans” to ensure that critical knowledge and experience is transferred from retirees to staff who remain — before it is too late.
•Identify those job categories where issues are not critical or where ongoing staffing efforts will probably be sufficient. The “value” of creating detailed plans for these positions won’t exceed the time and cost required to develop those plans.
Define all required staffing actions
This is about more than just recruiting or replacement. Some HR and staffing professionals forecast the number of retirements and think that the job will be done when they recruit that number of people.
Usually, the number of staffing actions required far exceeds the number of openings expected. Take, as a simple example, an organization that has three management levels. Suppose that 10 managers at the most senior level are expected to retire. It is unlikely that these openings would be filled from the outside.
Instead, the jobs will probably be filled through promotion, with any new hiring being done at the lowest level. Thus, a minimum of thirty staffing “actions” would be needed to fill the ten openings:
•10 promotions from the second level to fill the 10 openings at the highest level;
•10 promotions from the lowest level to replace the 10 people promoted from the second level to the highest level; and
•10 new hires to replace the 10 lowest level staff promoted to fill the middle level positions.
Any retirements at the middle or lower levels (or more than three management levels) would increase the number of staffing actions even more. In addition, define the development that will be needed (provide some of those who are to be promoted with the skills needed in their new roles). Staffing plans must include all of these actions.
Go beyond the traditional retirement analyses that predict with great precision the number of expected retirements. Address retirement needs by addressing the most critical issues that will arise. Don’t try to address “all the issues.” Identify all the staffing actions that will be required, including, but going beyond, recruiting.
By tailoring these plans so that they are appropriate for each issue, the results will be much more valuable to managers and the organization.
Thomas Bechet is principal of Wayne Ill.-based Bechet Consulting. He is the author of Strategic Staffing: A Practical Toolkit for Workforce Planning (AMACOM, 2002) and has taught strategic staffing at the University of Michigan and Cornell University. For more information, contact Tom at (630) 443-4171 or [email protected].
Organizations should act now to identify critical shortages, define the impact and develop specific staffing and development plans in response.
Yet many companies seem to just spin their wheels — choosing to simply analyze problems at a “high level” rather than actually solving them. HR and staffing departments not only need to identify, prepare for and address coming retirement issues, but create staffing plans that drive action.
Traditional approaches not sufficient
When it comes to retirement analyses, most organizations conduct two different types. One is typically too general and the other, while more specific, is usually insufficient by itself.
Some organizations conduct broad studies of possible retirements. But because the findings are so general, they are difficult to act upon. Studies that identify retirement issues among a company’s entire workforce, for example, usually contain data summaries, combinations of jobs and data compilations that make it virtually impossible to define specific staffing plans.
If a study looks at all engineers across a unit, any staffing plans based on these findings are, by definition, for that combined group — engineers as a whole, not by discipline.
Other organizations include risk assessments arising from retirements as part of succession planning processes.
While often helpful, this approach is rarely sufficient. What about all the retirements in positions that are not included in the succession planning process? How will they be identified and addressed?
In addition, the focus of succession planning is usually on developing candidates. How often do those plans provide for the transfer of knowledge, experience and personal relationships from managers to candidates?
Finally, detailed analyses of retirement situations usually include attempts to precisely define retirement numbers. These focus on critical job categories, but fail to define what needs to be done to address the critical staffing issues.
These kinds of analyses just are not useful — but they are good examples of how the staffing function is missing an opportunity to make a strategic contribution.
The following practical suggestions might be useful for staffing functions looking to move beyond analysis and make a real strategic contribution to the organization.
One caution: Remember that “staffing” refers to all movement into, around and out of an organization. This includes, but is more than, recruiting. It also includes internal placement, redeployment, transfers and any other type of job change.
Define appropriate objectives at the start: Fully define the staffing actions required to address retirement issues. The objective is not to just analyse (or better define) retirement issues.
HR has done the “right” job when it develops specific solutions to the most critical problems, not just better definitions or a better understanding of what’s wrong.
Be specific, not generic: Many organizations develop broad analyses of retirement issues that span vastly different organization units, job categories, locations and employee demographics.
This analysis may seem important (or interesting) at first, but rarely does it produce results that a company can act on.
Is it really helpful to know that 22 per cent of senior management is slated to retire over the next five years? Can you really develop any plans to address a need as general as this?
Wouldn’t it be more helpful to define, for example, the specific staffing actions needed to address the needs that will arise when 40 per cent of the most experienced production staff retires in the next three years? What if the issue relates to the potential retirement of a senior marketing manager who is the “face of the company” for major customers? What if the head of labour relations has developed a long-standing trust of your union’s leaders?
What if there is a senior manufacturing leader who knows just where to “kick” the forging press when it begins to act up? What is being done to transfer this experience to others before the person retires?
Focus efforts and tailor plans to issues: Don’t try to solve all problems, especially not all at once. Instead, focus efforts on shortages that will be most critical and develop plans to address each issue. Here is an approach that works well:
•Define the percentage of employees in each job category who are eligible to retire in the next three to five years. Base the calculation on normal retirement “rules” (for example, age plus service equals 80 with a minimum of 10 years service).
•Consider segmenting the population by business unit or geography. Retirement rates often differ significantly due to company culture, climate and working conditions; take these differences into account.
•Identify jobs where the projected retirement percentage is 25 per cent or higher and develop quantitative staffing models for just these jobs.
This modelling process normally includes defining staffing requirements, forecasting future staff availability, calculating gaps and surpluses, developing strategies and defining specific staffing plans.
These models should include realistic assumptions about the number of retirements expected from each of the job categories.
•Identify job categories where losses may be few in number, but significant in impact: losses of key senior managers or experienced technical staff. For these jobs, create succession and development plans, not staffing models.
In addition, it might make sense to develop “knowledge transfer plans” to ensure that critical knowledge and experience is transferred from retirees to staff who remain — before it is too late.
•Identify those job categories where issues are not critical or where ongoing staffing efforts will probably be sufficient. The “value” of creating detailed plans for these positions won’t exceed the time and cost required to develop those plans.
Define all required staffing actions
This is about more than just recruiting or replacement. Some HR and staffing professionals forecast the number of retirements and think that the job will be done when they recruit that number of people.
Usually, the number of staffing actions required far exceeds the number of openings expected. Take, as a simple example, an organization that has three management levels. Suppose that 10 managers at the most senior level are expected to retire. It is unlikely that these openings would be filled from the outside.
Instead, the jobs will probably be filled through promotion, with any new hiring being done at the lowest level. Thus, a minimum of thirty staffing “actions” would be needed to fill the ten openings:
•10 promotions from the second level to fill the 10 openings at the highest level;
•10 promotions from the lowest level to replace the 10 people promoted from the second level to the highest level; and
•10 new hires to replace the 10 lowest level staff promoted to fill the middle level positions.
Any retirements at the middle or lower levels (or more than three management levels) would increase the number of staffing actions even more. In addition, define the development that will be needed (provide some of those who are to be promoted with the skills needed in their new roles). Staffing plans must include all of these actions.
Go beyond the traditional retirement analyses that predict with great precision the number of expected retirements. Address retirement needs by addressing the most critical issues that will arise. Don’t try to address “all the issues.” Identify all the staffing actions that will be required, including, but going beyond, recruiting.
By tailoring these plans so that they are appropriate for each issue, the results will be much more valuable to managers and the organization.
Thomas Bechet is principal of Wayne Ill.-based Bechet Consulting. He is the author of Strategic Staffing: A Practical Toolkit for Workforce Planning (AMACOM, 2002) and has taught strategic staffing at the University of Michigan and Cornell University. For more information, contact Tom at (630) 443-4171 or [email protected].
