An Evidence Based Approach to Workforce Planning

The SACS Model of workforce planning is based on a comprehensive scientific literature review looking at a range of evidence-based models.

As part of the SACS Model, you firstly need to identify the current state of your organisations – how many employees do you have and are there any gaps in skills. Secondly, you need to look at environmental factors such as economic issues or competitors. Then process and culture including leadership need to be evaluated. Finally, you need to address questions about the future state of your workforce.

Read on to learn how to implement the SACS model.

Watch the next video in this series here:

Part 5 – Leadership Behaviours for Effective Workforce Planning

And watch the previous video here:

Part 3 – Creating Strategy and Role Clarity

And if you know of anyone who would benefit from this video, please share it with them.

Video Transcript

A breakdown of the SACS Model of Workforce Planning

Hi, Andrew from SACS, and welcome to video number four in our six video series on “Workforce Planning for the New Normal”.

In this particular video, we are going to show you the SACS model of workforce planning.

It’s an evidence-based model of workforce planning, but most importantly, it gives you some ideas about what’s involved in a workforce planning process and the sequence of events that you might like to consider in going through.

Now, the important thing about this is that we’ve undertaken many workforce planning organisational reviews for a range of different industry sectors, and one of the things that’s really confusing about workforce planning is that it tends to be a multi-part process.

So going back some years ago, I did a literature review of what evidence-based workforce planning looked like and developed the SACS model of workforce planning.

So that’s how we explain to clients what workforce planning is, and literally, when we undertake a workforce planning project for a client from end to end, what we do is we work our way through the SACS model of workforce planning.

Now, of course, some projects will be one part of the workforce planning process, but this is a way of showing you an integrated approach to this. Just to show you what we’ve dealt with in the video series so far, we talked about what the new normal is.

We gave a definition of workforce planning. The last video was about strategy and role clarity, and this one is about the SACS model of workforce planning.

The next one’s about leadership of workforce planning, and then what are the types of people that cope well with challenging times and change, generally, because workforce planning, certainly, is a big exercise, and it works best where organisations are populated with people who are resilient.

So we’re really saying what kinds characteristics lend themselves to that resilience, but to get to the subject matter at hand, this question of the SACS model of workforce planning, here it is, this is the SACS model of workforce planning.

Defining the Current State

Now, it’s a simple graphical kind of a model (refer to video), and what I’m going to do is just walk you through the various components of the model so that you see the types of things that are typically involved in workforce planning.

Now, the first thing you’ll see is that there’s a definition of the current state and the definition of the current state really has two important aspects to it.

One is the quantitative nature of the current state, which is how many employees do you have, of what type? The second is the qualitative analysis, which things like skills gaps.

It’s things like strengths that we have from a capability and experience and talent point of view.

It’s all the things that affect the current state of our workforce. Now, there’s a bunch of definitional and statistical things associated with that as well.

So for instance, what is the demographic of our workforce? What age are they? What’s our gender balance? What’s our ethnicity balance? It’s also things like staff turnover rates because that can be very important. If you’ve got a staff turnover rate that’s about 12%, which is the average, the average in Australia is about eight to 12%.

By the way, interesting, in the UK, it’s closer to 20%. Quite fascinating as to why there are such big differences in different economies, but if you’ve got a staff turnover rate of about 12%, your workforce plan might well look very different from an organisation that’s got a staff turnover rate of 20%, let’s say. So definition of a current state is really important.

Now, one of the things that you can do, if you do this in an evidence-based way, is that you can use statistical analysis to identify exactly where your current gaps exist.

Staff Turnover

And to use the example of that, we had a client once that believed, that had high staff turnover, and they believed that staff turnover came from a particular area.

When we statistically modelled the staff turnover of various areas, we in fact found that the area, which was one of the biggest areas that was thought to be the big contributor to staff turnover, statistically had slightly less turnover than other parts of the organisation.

Now, we touch on an interesting topic, which is what is staff turnover and how do you define it? And I don’t have time to go into that in much detail in this video, but there are evidence-based ways of working out staff turnover and whether you are growing or shrinking can affect the staff turnover statistics that you discover, and very few organisations actually report their staff turnover in the best way possible.

So if you’re interested in that topic, search on our website and our knowledge hub for further information about how to do that. That’s the current state.

We need to define that, and that of itself might identify some development needs for us.

For instance, we can’t find a particular type of staff member that could be a gap which exists right now. Other things might be, we’ve been trying to morph already into a slightly different type of organisation, but we’re just not getting there.

That’s a current state definition.

Environmental Factors

Then you look at the environmental factors that surround the current state.

Now, what do we mean by environmental factors? Environmental factors could be economic issues. It could be competition that we are facing from competitors who are affecting our margins, let’s say. It could be government policy. It could be expectation of consumers. What consumers are looking for from us. Those are environmental factors.

It could be our physical layout. So the environmental factors could be the quality of our buildings.

We worked with a client once that had extremely poor quality buildings and this was affecting the wellbeing of employees and productivity. So in fact, as part of the workforce planning process, they resolved to do a building remediation programme.

It could be questions so about geographical spread because if you’ve got, say, 1,000 employees in one office, that’s a very different thing from having 1,000 employees in 100 offices, which you find in certain types of businesses.

So all of those environmental considerations are important and should be taken into account to work out a gap analysis of the organisation, but also to identify what’s likely to happen from a wellbeing and a productivity point of view for that workforce.

So that’s the current state and the environment surrounding the current state.

The Enabling Process

I’ll move next to the enablers, process and culture including leadership.

Now, every organisation in the world uses process in their human resource management, and if you think of the processes that really affect human resource management, it’s things like our recruitment methods. Are we using the most evidence-based approaches to candidate attraction and candidate evaluation? Because if you’re not, your workforce plan is going to be much harder to execute.

Workforce planning really has two components to it.

The buy component, where you will recruit the people who are necessary to be able to deliver the outcomes of the future, and then there’s the build component, which is where you’re going to train, develop, coach, guide, mentor your existing staff to be able to be the workforce of the future.

So the processes, the enablers, are all of those things, and the processes are things like recruitment, as I mentioned, but it’s also things like our training and development.

It’s things like our leadership processes. It’s things like the technology that we use to underpin the way we manage our leadership development programmes or our training or our succession planning, another component is succession planning.

So all of those processes, when we undertake a workforce planning project, we look at what is being done by a particular organisation, and very often, we’re able to help the organisation to improve markedly by simply bringing them up to date with most contemporary practise in the enablers.

So how we build the workforce of the future and how we buy the workforce of the future, that’s all determined by our enabling process.

Short-term Forecasting

Then we look at the question of the future workforce.

Now, you’ll notice that we have a time horizon of about two years here.

Let me explain why it’s so short term.

I mentioned in our very first video in this sequence that one of the reasons that workforce plans have died over the years is that people tried to forecast too long.

So if you’d build a workforce plan that goes for 10 years, well, beyond two or three years, your forecasts are entirely wrong because there is research and a fellow by the name of Capelli in the United States of America did a survey of the accuracy of organisational forecast across hundreds of companies, and what he discovered is that on average, these forecasts were wrong by 30%.

So you can imagine, if you are forecasting three or four years out, a compounding rate of 30 or 40% makes the second, third, fourth, fifth year, the further, you get away from now, the less accurate they are.

So I bother to go to the trouble of making these forecasts if they’re going to be so wrong? So we recommend that people use a short term workforce planning process. So two years or maybe three years and then a rolling re-forecast.

So every year, you’re going to have a review date to take your workforce plan and update it in all of its respects.

Now, if you do that, your forecast get progressively more accurate.

If you do this, this doesn’t mean that you ignore things that take longer than one, two, three years to achieve, but don’t try to forecast them accurately.

Undertake them if you feel that there’s a cost benefit case for doing so, but don’t kid yourself that you’re going to be accurately able to forecast too far in the future.

So our recommendation is two or maybe three years, but on this rolling re-forecast basis.

Qualitative and Quantitative Planning

We also suggest that if you identify the future state, that’s got to be, once more, both quantitative and qualitative.

Quantitative, in the sense of how many people we are going to need. Qualitative, in the sense of what type of people we are going to need, and that type might be educational background. It might be attitudinal stuff. We’re finding that more and more organisations are focusing, are factoring psychometric characteristics into their workforce planning process.

To give an example of that, we dealt recently with an organisation which is transitioning much more into a stakeholder management type of organisation.

They were a direct service provider, but in future, they’re going to provide their services increasingly through a range of intermediaries who will actually do the work.

Now, that changes the nature of the employment. and it changes the nature of the types of skills that you need because instead of direct service providers, the organisation is going to need more people who are good at contract management, stakeholder management, things that really rely on high quality relationships, and so if we look at the psychometric profile of that organisation, we psych tested a very large slice of that workforce, what we discovered is that, in general, the company has historically attracted people who are quite shy and introverted.

So psychometrically what that means is that they may need to recruit more extroverted people who are going to find it more natural to do this kind of outreach stakeholder kind of activity.

So there’s an example of how you can build psychometrics into your workforce planning process about planning the workforce of the future.

If you’re going to plan the workforce of the future. then that does rely heavily on the fact that you’ve got clarity about strategy, and the last video in this sequence was all about that.

How do you ensure that you’ve got clarity of strategy? Because if you don’t, your ability to forecast the workforce of the future is much reduced.

Now, in that workforce of the future, SACS has intellectual property which allows us to coach, train, guide, and develop employees within an organisation about how to do this forecasting because the idea is you don’t just do it for them.

You leave them with a legacy of the capability of doing it for themselves, and so we typically transition organisational intellectual property into the organisation so they can then do that in future without having to rely on us, but that’s an important skill.

The other thing is that when people become skilled in this, the more they do it, the better they get at it, and certainly, if you’re going to develop organisational forecasts, the best way of doing it is in a distributed fashion where each division comes up with their forecasts, but, of course, from a governance point of view, there needs to be some central authority that then signs off the forecast that people come up with.

The Future State

Then environment factors surrounding the future state.

What do we know about the future of the environment that we are working within? Are there legislative changes? Are there trends that we can predict in terms of the nature of the work that people are doing or what will be impacting them by way of things like customer expectations or competition, those kinds of activities?

So the final part of the workforce plan is people plans.

Now, these people plans you’ll notice that we have a People Plan 1 and a People Plan 2.

People Plan 1 is what we’re going to do in the current year.

Workforce planning can be hard to sell to an executive group or to a board largely because they wonder about the benefit that they’re going to get. I think that the people plan should be a programme of activity, which is made really clear.

We’re going to hire this number of people in these areas over the next six months.

We’re going to train these people in these skills to equip them to be the workforce of the future over the next 12 months.

Here’s how we’re going to measure the success of what we’re doing.

If you’ve got that kind of a detailed, almost like a project plan of activities, that makes it far easier for a governance group to accept and relate to your recommendations.

So I think that that’s one of the things that can be really useful to make a workforce plan sellable to an executive group because they see if all of this comes off, we know exactly how we’re going to measure the success of this and it can make people more confident to invest in it.

A couple of things about workforce planning in a conceptual sense.

You shouldn’t use a workforce plan as a bolt on to an organisation. I’ve mentioned this in previous videos.

You really should cause the intellectual property that you have, the way we recruit, the way we do succession planning, the way we do leadership development, the way we do our training, that should all be integrated into the workforce plan, and the workforce plan in effect becomes a kind of an environment by which we run the process of managing our workforce.

Now, if you do that instead of a kind of a dead weight that has to be carried on through the organisation, this becomes a way of harmonising your intellectual property on workforce-related matters, on your human resources management matters so that it’s done in a very proactive fashion, and it’s done in a very integrated fashion.

That’s the way to do workforce planning rather than to do it piecemeal.

Take a Linear Approach

Another general conceptual point I wanted to make about workforce planning, it’s amazing how many workforce plans are circular.

So you got the sort of plan, do, act kind of a cycle.

You know, I can’t understand that.

I think that if you make it linear and you harmonise it with your normal planning period, and a good way of doing this is to harmonise it with budgeting because many organisations, their workforce cost is a very big slice of their revenues, and so harmonising the workforce plan with the budgeting process and making it that kind of a rolling re-forecast process, that’s a much more successful way of doing this.

So consider that.

If you’re able to cause it to be the storehouse of your IP on people management, and you harmonise it with the strategic cycle, the budget cycle of your workforce, then that will work well. In addition, of course, whatever strategic changes the organisation has got in place, you should write your workforce plan in such a way that when a big change comes, you simply pull it out, you use it to help you to plan again how you’re going to tackle these changes from a workforce point of view, and then it becomes a tool that you can use rather than something that needs to be supported by the organisation.

Use Clear Communication Methods

So there are some considerations about how to undertake workforce planning, but in the light of the SACS model of workforce planning, which is, really, an aid to integrate workforce planning and make it simple for people to understand.

When we are running workforce planning projects for people, quite often, when we are doing activities and an activity is related to this workforce planning project, what we’ll do is we’ll actually put this infographic (refer to video) at the top of correspondence or communication that people are receiving and we put an arrow to indicate, “Well, this is all about analysis of the current state,” and that’s just a simple way of as people are asked to participate in the workforce planning process, it’s a way of showing them how this relates to the overall project and what it all means.

So that could be a good form of communication to keep things simple.

Creating Competency Families

Another point I’d like to make about workforce planning is that it’s a mistake to try to make it to micro.

So the slide that I’m going to show you now is all about competency families (refer to video).

These can also be called capability families, and this is related to an imaginary company called XYZ Corporation.

It’s a health services company that I’ve used as an example in other parts of this video sequence.

What we’re identifying here is that to achieve certain outcomes, the organisation tends to have types or families of employees, so new business development, clinical services providers, IT quality management. Identifying these competency families or job families, as they’re sometimes called, can be a really, really beneficial thing to do.

We all know about the phrase economies of scale.

So if you’re going to do something with a group of 400 employees, say, recruitment methods, training and development methods, that’s far better than doing with a group of four employees and devising an entire approach for those four employees.

We’ve discovered that if you have competency families, job families in an organisation, you can quite often, let’s say an organisation has 1,000 employees, you can quite often identify, let’s say, 10, eight, nine, seven job families which account for maybe 80% of employees.

We undertook a big project for an organisation that employed, well, I forget how many, but well, over 10,000 people, and what we identified is that because they’d grown by acquisition, they had certain positions which were very similar across different geographical locations, but called quite different things because they retained historic titles that they had had from the predecessor organisations.

Now, what that meant was is that when we were able to aggregate all of those people up and show them that they were part of a job family, and by the way, there was a change of title for some of these roles to harmonise and make it clearer that they were a part of a job family, it had a number of benefits.

One was that allowed the organisation to get better at recruitment because all these jobs, they’re part of the same job family.

When you’re looking for similar competencies, you’re looking for certain benefits to attract candidates.

Candidate attraction’s a big challenge right now.

By doing that, it made them more effective at candidate attraction and candidate evaluation, and then what they were able to do is that they were able to build induction processes and training and development processes, again, to give them that benefit of economy of scale.

Now, when they did this, this just made everything more efficient, but it also improved the internal career market because it made it clear that a person who was here could move over to here because the job were similar in terms of the competencies and capabilities necessary to be able to do that job.

So that can be a really significant benefit. So we suggest the model as we’ve described it, but we also suggest going through the job family analysis because you’ll find that instead of trying to handle 1,000 jobs if you’ve got 1,000 employees, you may well end up handling seven or eight job categories, plus a sprinkling of jobs that don’t fit into the job or competency families.

So that’s a SACS model of workforce planning, and the next video, we’ll be talking about leadership of workforce planning. Workforce planning is a big project.

It’s complicated very often, and it takes a lot of leadership and guidance to make it work well.

Join us for the next video where we’ll give you some really practical tips on how to lead the process of workforce planning.

Watch the next video in this series to find out more about workforce planning for the new normal:

Part 5 – Leadership Behaviours for Effective Workforce Planning

And watch the previous video here:

Part 3 – Creating Strategy and Role Clarity

And if you’d like some help with Workforce Planning for your organisation, contact us about our SACS Model of Workforce Planning.

SACS Consulting