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Workforce planning for the new normal of an uncertain future

Den Howlett Profile picture for user gonzodaddy October 24, 2016
Summary:
Workforce planning in an age of apparent skills shortage is still rooted in the idea that employees are a set of functions that have to be ticked off. This isn't planning, it's a transaction. The new world of work needs something better.

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One of the most hotly contested issues in business is the vexed question of the so-called talent shortage. Some think it is real - try hiring great programmers in the Bay Area - while others say it is a myth. My view is that there is a bit of both going on but exacerbated by other problems.

In the Bay Area for example, the burgeoning startup community shows no signs of contracting and yet the infrastructure to support high demand just isn't there. Evidence? Sky rocketing real estate prices that is now having the effect of driving people away from the area. More evidence? Check the commute times between San Francisco and Palo Alto. From what I can see and have had reported, life in the Bay Area consists of work, sleep, eat then rinse and repeat on a six day cycle. Doesn't sound like fun to me.

On the other hand, recruitment experts say there are plenty of applicants for many types of job. Last year, Janine Milne reported  a conversation with Bill Boorman, a 30 year recruiter:

...the talent shortage is a “massive myth”. With an average 204 applications per hire, he suggests that we are a long way from the icy grip of a skills shortage:

To me, that’s not a talent shortage, it’s a finding problem.

He estimates that 95% of job applicants are considered unsuitable or unqualified. Organizations are clearly attracting the wrong applicants, or as Boorman colorfully puts it:

We’ve become terrific sh*t-magnets.

It’s not volume but quality applications that organizations need. Part of the problem, maintains Boorman, is the “overdose of employer branding that has made all our organizations look pretty much the same”.

That sounds like a transaction problem to me and one that in today's market implies a lack of planning. Let me explain.

As I've started to study the problem of work following the Great Recession, it has become clear that not only have many corporations used that event as a way of reducing cost, certain segments are responding to the emergence of new business models that include a significant element of service.

Uber is the oft touted example of a disrupter and here, you can see the impact in the sense that in 2015, Ford Motor Company made a big splash by opening a research unit in Palo Alto, some 2,600 miles away from its Dearborn, MI. HQ.

In carefully choreographed media interviews, the company used all the right buzzwords to create the impression that it is doing something new, that it is disrupting itself and generally acting like one of the cool kids on the start up block. I give Ford a lot of credit for understanding how to play the media. Check this example from The Verge which is fairly representative of how this was reported:

One, it’s not just because the talent is in Silicon Valley, the whole ecosystem there. It’s a community of ideas. When you’re viewed as a part of a community you get a lot of benefits.

We are already seeing that with our Research and Innovation Center that we set up over a year ago. We now have over 120 professionals. It’s going to grow to maybe 160 by mid-year. Many of the projects that we’ve put in place, things that we’re doing for example, with Amazonthings we’re doing with DJI.

And how about  this for a nicely nuanced pitch to both the potential consumer and future employees?

We’re a brand that’s known for our accessibility. We’re a brand that’s known for our ingenuity and innovation. We’re also a human brand. What I mean by that is, we’re still a family company. We’re a brand that’s recognized around the world consistently. We don’t have different brands in different parts of the world.

As we go forward, we want to be viewed from all customers, and young customers in particular as having great products that have great technology, great safety, great fuel efficiency, et cetera. But also we want to be known as a brand that will help people be mobile.

What's missed from this, and most of the other analysis I've seen is that Ford set up a staging post in Palo Alto in 2012, close to three years before it started recruiting. Hold that thought. The company says in The Verge story:

No, what is actually prompting us to develop our Ford Smart Mobility strategy is that we’re looking at societal trends, right? Any business needs to take a point of view of the future. I’m not talking next month, five, ten, fifteen years out. We’re looking at some societal trends.

You don't look at trends unless you're playing a long game and so while the noise may have been around what Ford started to do in 2015, the reality is that the company is playing a long game that started years beforehand. To do that successfully requires an expansive view of planning. This is important because if you go back to my remarks earlier on, it seems to me that when people usually talk about labor shortages or recruitment planning, they are not talking about people but fixed profiles that have the feel of a functional checklist.

That is very different to the characteristics and attributes that are going to be required to assemble fluid and flexible workforces. And in order to do that, you need way more data than is usually available on a resumé.

Sticking with Ford for the moment, we can add in another data point. Earlier today, The Information asked whether a $1 billion  investment in Lyft, led by Ford helped lift (no pun intended) its market share in the ride share economy. It is hard to tell but the article (sub required) tellingly notes that:

One driver in San Francisco recently told The Information he hadn’t paid a penny to Lyft in several months because he drove a new car, and Lyft promised not to charge him and others as long as it stayed that way. That’s costing Lyft a lot of money.

And Lyft itself acknowledges that its business is capital intensive. I wonder what make those cars are? Most I see are Toyotas and the article doesn't say. I'll let you know next time I collar a Lyft driver.

Again though, my point is that when viewed through this lens, you can see how, as a business model changes, companies with the resources to do so are not simply placing random bets. They are executing upon a well thought out plan that takes into account adjacencies and the data those markets are revealing.

As a general point of principle, I see very little evidence that HR vendors are looking at industrial shifts from that perspective and that, in turn, leaves companies like Ford and many others to their own devices.

On the other hand, if you take Walmart as an example, you can readily make the case that it took the dehumanizing of its workforce too far, only reversing tack on the basics of adequate pay levels when it realized this had a direct knock on effect with customer preferences.

Amazon may be eating retail strategies for lunch with its mechanized, e-commerce led approach but very large retailers like Walmart who have large bricks and mortar investment to protect will not find solace in omni-channel if they fail to adequately plan for the people who make it all work.

Brian Sommer has been hammering away at  the problem of how roles and responsibilities are changing, combined with a lack of enriched HR analytics  that act to help fulfill strategic purposes. His assessment of HR Tech 2016 was scathing in that regard and rightly so. It is tragic that there is so little to help companies at a time when they need fresh skills while at the same time have to manage displacement in favor of machines.

My view is that until the ecosystem of customers and technology partners work towards understanding the new labor patterns, the likely societal impact of change and plan with future business models in mind then workforce planning and recruitment will remain in its transactional mindset. To say for example that the answer to skills resetting is a bunch of new learning modules or MOOCs utterly misses the point.

The time for that broader conversation is now because as machines take up more of the routine tasks that used to be performed by clerks of every stripe, it won't be enough to use those conditions as a lever to force pay and benefits down. the Walmart lesson is there to be studied, as is the Ford example.

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