Talent shortfalls have serious implications for business results, and poor workforce planning is a major cause that organizations are struggling to address.
According to a new Visier-sponsored report released by Harvard Business Review Analytic Services, the majority of leaders (73 percent) have experienced talent shortfalls leading to missed business objectives as a result of poor workforce planning (the process through which companies align their workforce supply with their business needs).
“Executives recognize that workforce planning is necessary to secure both the right talent, and the right amount of it, to meet business goals, but our research shows they clearly have a long way to go in making this a reality,” says Alex Clemente, managing director of Harvard Business Review Analytic Services.
In PwC’s most recent Annual Global CEO Survey, over 70 percent of CEOs identified the “availability of key skills” as one of the top three threats to their companies—an eight-year high for that question. Although business leaders know talent shortfalls prevent their companies from achieving their business goals, the HBR-AS survey reveals that they have not aligned their workforce planning process to manage the issue:
Almost half (44 percent) of respondents consider their workforce plans to be driven by finance and to not take talent availability considerations into account.
Although 72 percent would like to be able to model and compare staffing strategies across locations, teams, seniority, skills and other factors to develop better workforce plans, fewer than one-fourth (22 percent) are able to do so now.
“For many organizations, workforce planning is a finance-driven process focused primarily on managing headcount within the cost budget. But the budgets created by finance are disconnected from the actual talent needed to execute the business objectives,” says John Schwarz, CEO of Visier. “Consequently, the important decisions related to recruitment, retention, compensation, and productivity are constrained by budgets that do not reflect the people reality.”
To improve planning, 57 percent of respondents say they need data on what positions/talent are required to meet business objectives, and 57 percent say they need data on what is happening with talent acquisition and attrition.
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