The Challenges Facing Workforce Planners
In today's fluid work environment, dependable and up-to-date information is one of the secrets to good business planning. This applies to all areas of the business, including the workforce. To garner insights into how large companies conduct workforce planning, the Human Resource Institute (HRI) conducted its "Workforce Analytics, Reporting, Planning" (WARP) survey in the spring of 2002. The 43 responding companies had 1,000 or more workers, and most were members of the Fortune 500.
These firms collect a wide range of workforce data. Virtually all respondents collect information on headcounts, hires and terminations, and most gather information on promotions (77%) and transfers among businesses (70%). Write-in responses suggest that companies collect a range of other data as well, such as equal-employment-related demographic data, compensation and benefits costs, tenure information, time-to-fill data, and reasons for employee separation.
Among the most interesting findings of the survey is that workforce planning data is not widely and regularly used by all managers. In fact, only 5% of responding companies said that "all managers use it frequently to make business decisions." On the other hand, in 40% of firms "some managers" use it frequently. Over a quarter of respondents (28%) said that some managers use such data occasionally, and another 12% say it's rarely used.
One factor that obviously affects who uses such data is the goal behind workforce planning itself. Exactly which organizational processes use workforce plans? The process that's most commonly cited (80% of respondents) is recruitment, followed by financial planning and budgeting (65%) and learning and development (42%). A short follow-up survey also revealed the importance of workforce planning to work assignments and organizational restructuring. The time horizon for most workforce plans is either between 6 and 12 months (44%) or between a year and five years (42%). Few respondents (14%) have time frames that are less than six months.
Another factor that probably influences the degree to which business managers use such data is how it's packaged. Most companies (60%) use the traditional spreadsheet format, and 16% provide it in a raw data format. Newer formats such as HR dashboards (26%) and balanced scorecards (19%) are still relatively rare.
In many cases, the packaging seems related to the ways in which workforce data is aggregated and summarized. Two thirds of respondents use Microsoft Excel for this purpose, and close to half (47%) use Microsoft Access. The other tools used are often related to enterprise resource planning (ERP) systems: 16% use a PeopleSoft-branded solution, 14% use an Oracle-branded product, 12% use Cognos, and 9% use an SAP-branded solution. Excel was also the most frequently mentioned tool when respondents were asked how they store and maintain workforce plans.
For the purpose of storing HR-related data, there are a variety of ERP systems from which to choose. Among these respondents, the most widely used package is PeopleSoft (53%). About a quarter (26%) use SAP, 5% use Oracle, and 40% use other tools, suggesting that quite a few firms use more than one system.
The sheer complexity of the task, as well as organizational changes (e.g., mergers and restructurings), affects an organization's ability to collect and analyze such data. About half of respondents cite organizational change as one of the biggest hurdles they face in managing workforce data. While just 16% cite the problem of obsolete technologies, many (42%) say that keeping data timely is a major problem, and nearly as many (40%) say ensuring accuracy is tough. The HR function nearly always "owns the accuracy" of such data, although some companies (12%) share that ownership with finance.
Considering the hurdles involved, it's little wonder that most firms haven't yet automated the process of making workforce planning data available to business managers. Only about a fifth deliver such data automatically via Web reports, and 14% automatically generate paper reports. About half regularly provide such data via a process that is facilitated through the HR function. Fifty-eight percent provide data if it's requested.
Generally speaking, it appears that workforce planning still contains a number of challenges for HR professionals. Providing valuable, timely, accurate, user-friendly and consistent information to all managers is a goal that many firms continue to work toward. And even once this has been achieved, the challenge of formulating and coordinating effective plans - ones that won't quickly become outdated in a fast-changing environment - will remain.
These firms collect a wide range of workforce data. Virtually all respondents collect information on headcounts, hires and terminations, and most gather information on promotions (77%) and transfers among businesses (70%). Write-in responses suggest that companies collect a range of other data as well, such as equal-employment-related demographic data, compensation and benefits costs, tenure information, time-to-fill data, and reasons for employee separation.
Among the most interesting findings of the survey is that workforce planning data is not widely and regularly used by all managers. In fact, only 5% of responding companies said that "all managers use it frequently to make business decisions." On the other hand, in 40% of firms "some managers" use it frequently. Over a quarter of respondents (28%) said that some managers use such data occasionally, and another 12% say it's rarely used.
One factor that obviously affects who uses such data is the goal behind workforce planning itself. Exactly which organizational processes use workforce plans? The process that's most commonly cited (80% of respondents) is recruitment, followed by financial planning and budgeting (65%) and learning and development (42%). A short follow-up survey also revealed the importance of workforce planning to work assignments and organizational restructuring. The time horizon for most workforce plans is either between 6 and 12 months (44%) or between a year and five years (42%). Few respondents (14%) have time frames that are less than six months.
Another factor that probably influences the degree to which business managers use such data is how it's packaged. Most companies (60%) use the traditional spreadsheet format, and 16% provide it in a raw data format. Newer formats such as HR dashboards (26%) and balanced scorecards (19%) are still relatively rare.
In many cases, the packaging seems related to the ways in which workforce data is aggregated and summarized. Two thirds of respondents use Microsoft Excel for this purpose, and close to half (47%) use Microsoft Access. The other tools used are often related to enterprise resource planning (ERP) systems: 16% use a PeopleSoft-branded solution, 14% use an Oracle-branded product, 12% use Cognos, and 9% use an SAP-branded solution. Excel was also the most frequently mentioned tool when respondents were asked how they store and maintain workforce plans.
For the purpose of storing HR-related data, there are a variety of ERP systems from which to choose. Among these respondents, the most widely used package is PeopleSoft (53%). About a quarter (26%) use SAP, 5% use Oracle, and 40% use other tools, suggesting that quite a few firms use more than one system.
The sheer complexity of the task, as well as organizational changes (e.g., mergers and restructurings), affects an organization's ability to collect and analyze such data. About half of respondents cite organizational change as one of the biggest hurdles they face in managing workforce data. While just 16% cite the problem of obsolete technologies, many (42%) say that keeping data timely is a major problem, and nearly as many (40%) say ensuring accuracy is tough. The HR function nearly always "owns the accuracy" of such data, although some companies (12%) share that ownership with finance.
Considering the hurdles involved, it's little wonder that most firms haven't yet automated the process of making workforce planning data available to business managers. Only about a fifth deliver such data automatically via Web reports, and 14% automatically generate paper reports. About half regularly provide such data via a process that is facilitated through the HR function. Fifty-eight percent provide data if it's requested.
Generally speaking, it appears that workforce planning still contains a number of challenges for HR professionals. Providing valuable, timely, accurate, user-friendly and consistent information to all managers is a goal that many firms continue to work toward. And even once this has been achieved, the challenge of formulating and coordinating effective plans - ones that won't quickly become outdated in a fast-changing environment - will remain.