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Powered by HCMI
Workforce Planning in the Age of “The Great Resignation”
Workforce Planning to Survive & Thrive in Uncertain Times

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✓ Advanced analytics & planning SaaS to optimize labor spend
✓ 1,000s of AI powered metrics with dynamic visualization
✓ Scenario planning links HR, Finance, & Operations data
✓ Workforce analytics, market intelligence & planning firm
✓ Pioneer in linking people investments to financial ROI
✓ Software, managed analytics services, and consulting
by HCMI
SPEAKER
Jeff Higgins – Founder & CEO, Human Capital Management Institute
Jeff is a recognized thought leader in Human Capital financial measurement, metrics and
planning with 30 years experience supporting leading global organizations. A former CFO
and HR executive, Jeff has helped organizations around the world quantify the ROI of
workforce decisions and realize cost saving opportunities of up to $1.0 billion USD.
© Human Capital Management Institute 2
Jeff can be contacted at jeff.higgins@hcminst.com or www.hcmi.co
Research available at www.humancapitalreporting.org and www.hcmi.co

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Predict & Act
- Prescriptive Analytics
- Optimization Modeling
Source: Gartner Inc.
Analytics and Workforce Planning Maturity Model
3
© Human Capital Management Institute
The Future is Predictive, Optimization Modeling and Prescriptive!

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Workforce Analytics vs. Workforce Planning
The mutually beneficial relationship of Workforce Analytics & Planning
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Workforce
Analytics
Past Present
Workforce
Planning
Decision
Making
Historical
Workforce
Future
Workforce
Current
Workforce
Future
Trend Analysis Future Scenarios
Workforce Knowledge
Predictive Analytics Key Performance
Indicators
Workforce
Optimization
© Human Capital Management Institute

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The Business Case for Workforce Planning
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Industry / Market Data
Risk Factors
Technology Changes
External Statistics
Bureau of Labor Statistics
Location,
Labor Costs
HR
Workforce
Demographics
Skill Shortages
Market Shifts
Off-shoring /
Outsourcing
Globalization
Disasters / Health Crisis
© Human Capital Management Institute
Drivers of workforce realignment and planning

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Example: The Lock & Key of Workforce Strategy
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Alignment between workforce and business strategy
IF… THEN…
If the lock is to consistently achieve 10% revenue
growth and 12% profit growth for the next three
years.
The key is to find out what it is we can do from a
workforce strategy standpoint to enable the
organization to achieve this goal.
WORKFORCE STRATEGY
BUSINESS STRATEGY
© Human Capital Management Institute

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© Human Capital Management Institute 7
Poll Question
Do you currently have a workforce plan or workforce strategy?

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Business Strategy Linkage to Create Workforce Strategy
How workforce links to business strategy
Business Strategy HR Strategy & Activities
KPI Metrics
Workforce Strategy
Optimize Talent
Operations
Customer Service
Focus
Engage/ Retain
Talent
Build Talent
Pipeline
Reduce workforce costs
surgically, keep critical jobs
Retrain and upskill Talent
to fill open jobs
Close open jobs, cuts
contract/temp workforce
Look at reduced hours
before cutting “core” roles
Sales Growth
Customer Service
Excellence
Build Workforce
Talent & Skills
Total Cost of Workforce (% of Revenue)
Revenue/Profit per FTE
Management Span of Control
High Performer Turnover Rate
Employee engagement scores (NPS)
Customer satisfaction Scores
Customer up-sell rates
Customer service training KPIs
Internal Hire Rate
Human Capital ROI Ratio
Return on Human Capital Investment
Quality of Hire Index
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Raise Workforce
Productivity
Reduce
Workforce Cost
Return on
Invested Capital
Retain Top Talent, Keep
people productive
© Human Capital Management Institute

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Facts in Workforce Planning
Things to know about Workforce Planning
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1. 90%+ of organizations are ineffective at workforce
planning. Few actually build a workforce plan
2. Workforce planning fails if seen as HR vs. business driven
3. Co’s don’t want workforce planning, they are driven by pain
4. Planning requires commitment it will not happen overnight
5. Be open to changing workforce processes & policies
6. Start with critical roles and talent gaps
7. Recruiting is a key, if integrated with other workforce data
8. Technology improves workforce planning for any company
36
33
33
32
32
31
28
26
25
0 10 20 30 40
Retaining key people to avoid skills gaps
Understanding what talent we will require in
future, and how to find it
Recruiting new qualified people to plug skills
gaps
Identifying and sourcing strategically critical
talent skillsets
Creating the right organizational structure
and processes
Ensuring that our HR strategy aligns with our
overall business strategy
Cultivating the right corporate values and
culture
Managing key-person and business continuity
risks
Managing the cost of talent
Which of the following are your company’s top strategic objectives in its
strategic workforce planning? (% of respondents)
Source: Economist Intelligence Unit survey, 2016

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Modern Workforce Planning Benefits
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What you can expect modern Workforce Planning practices can help you achieve
Expert workforce knowledge = (demographics, critical roles, top talent sources,
performance / engagement / retention drivers, internal + external labor market)
• Optimize workforce size/cost/productivity
➢ Use Total Cost of Workforce (TCOW)
➢ Surgical cuts vs. “across the board peanut butter” cuts
➢ Optimize costs/use of regular, contract and temporary labor
• Execute superior scenarios to stay ahead of market changes
➢ Implement low cost workforce or top talent workforce strategy
• Strategic talent arbitrage (i.e. “Money Ball”, by Michael Lewis)
➢ Rapidly re-deploy key skills/talent to fill needs
➢ Optimize internal vs. external hiring strategy

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Questions to Ask the Business
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1. Does the organization have a strategic plan? A business plan/budget?
• What is our workforce strategy? “buy the best”, “low cost workforce”
2. What future workforce is needed to achieve our strategic vision and goals?
• Is this different than the current workforce? How so?
3. What future scenario(s) have we anticipated?
• What playbook changes do we have for the scenario(s)?
4. What size & workforce cost do we need vs. what can we afford?
5. Do we need new skills, better talent, more talent, cheaper talent or ‘all of the above’?
Challenge question:
6. What’s in it for HR if we can show how to get better talent that costs less?”
What Workforce Planning questions to ask the business
1. Does the organization have a strategic plan? A business plan/budget? So, where is the workforce plan?

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The Workforce Planning Process
Linking workforce plan with business strategy
Strategic Plan
Operating Plan
“Budget”
Market
Changes
Industry
Changes
Supply vs. Demand Future Scenarios
Critical Job Roles
Skills & Talent
Workforce Plan
Workforce Strategy
“Talent Mgmt Strategy”
Business Strategy
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Building a Workforce Plan – What to Include
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1. WORKFORCE QUESTIONS: Background and Current State Issues
• Key Human Capital Questions to be answered
• Top Human Capital pain issues to be addressed or solved
2. SCENARIO DESIGN: Scenario Name and Future Vision State with Critical Talent Risks
• Top Human Capital pain issues to be addressed or solved
• Define core Workforce Strategy
3. Demand Forecast Macro (Top down) = Strategic Plan + Focus groups/Interviews
• Demand forecast data input = focus group/interview
• Top-down headcount, cost, productivity, financial goals + management metrics (i.e. span of control)
4. Demand Forecast Micro (Bottoms up) = Surveys/Focus groups/other
• Forecast headcount, labor cost + pain-point metrics (span of control, diversity, tenure)
• Identify critical roles, core vs. noncore, feeder job families/groups + career pathing
5. Supply Forecast Internal - Micro, Job Families/Critical Job Roles
• Internal Hires, Terms, Promotions, Transfers “Expected Hires” = Human Capital Flow Statement
• Quantify internal workforce change rates + “Build”, “Buy”, “Borrow/Rent” for talent
6. Supply Forecast External – External Talent Availability by Geography
• Future supply of critical + core talent roles by key geography/market. Is talent supply a constraint?
• Is it possible to get better fit or better performing talent that costs less?
7. DEMAND-SUPPLY GAP ANALYSIS: Talent Gap and Scenario Interventions “What-If” Modeling
• Linking important organizational or financial metrics is key to creating “reality based” workforce plans
8. WORKFORCE ACTION PLAN: Finalize Workforce Plan and Key Scenario(s) with Implementation Timing
Components of a workforce plan

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Human Capital Risks
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Opportunities for Workforce Planning to address business and human capital risks
How to Find Talent and Control Labor Costs with Least Possible Talent and Business Impact
➢ Using workforce data to model ‘what-if’ scenario options for leaders is the critical
➢ “You Can’t Manage, What You Can’t Model”
➢ Benefits that employees really value more than their costs is one trick
➢ Finding better talent that costs less sounds impossible but if you identify best hiring
source, and cultural fit it is very possible
Manage Workforce Cost
➢ Workforce cost does not move exactly in line with headcount, so it is possible to
reduce workforce costs greater than any workforce headcount change
Retain Key Talent
➢ Retaining Key talent in uncertain times (e.g. the best are have the most opportunities)
➢ Challenges in hiring (e.g. Cyber, Engineers, General Managers)
Leadership and Development
➢ Ensuring leaders communicate with sincerity and empathy and don’t panic
© Human Capital Management Institute

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Case Study: How to Reduce Workforce Cost and Add Staff to Solve
Demand-Supply Gaps
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Solving forecast talent cost gaps to create lower workforce costs and ROI
© Human Capital Management Institute
Default Scenario “No
Change” - Do it like
last year
Projected Total Labor Cost
Based on Scenario Workload Forecast
Headcount Needed
Based on Scenario Workload Forecast
“Young Talent” Scenario Bring in
new young talent to fill gaps

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© Human Capital Management Institute 16
Poll Question
What tools does your organization have/use to
model workforce headcount, labor cost and talent
retention scenarios? Excel?

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Cost Control Scenario: What-If Modeling to see what works
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© Human Capital Management Institute
Pandemic-Labor
Shortage Scenario:
+10%revenue,+12%profit
How to attract, hire,
retain staff & keep labor
costs from exploding?
How best to find
talent, control
costs while
retaining talent for
future growth?

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Use “What-If Modeling” to Find the Best Cost Savings Path
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Top down Workforce Planning Scenario shows how talent and cost gaps can be solved
© Human Capital Management Institute
Pandemic Scenario
calls for 25% Cost
Reduction in 2020
Small Cost Gap
Forecast Need to
reduce labor cost,
better retain talent
and find better fit
talent at lower overall
cost
in 2019
Goal to retain as
much workforce as
possible for Future
Growth

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First Lets Model Recruiting to Improve Talent Attraction
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Scenario: 10% Sales and Profit increase, but only if we can hire and retain better while controlling costs
© Human Capital Management Institute
Hiring means using
“Best Hiring
Source” to fill jobs
with talent that
will stay longer
2020 Scenario calls
for Hiring 2,000
staff annually while
improving
retention, time to
fill and more
Quality of Hire Focus
+ Efficiency to
enable more hiring
and fewer open
positions
Goal to retain as
much workforce as
possible for Future
Growth thru 2025

20.
How to Apply a Surgical Scenario from the Bottom Up
20
© Human Capital Management Institute
Surgical Changes
means not All Job
Families are treated
the same. Some are
incentive driven like
Sales or Mgmt,
while lower paid
roles are
wage/salary and
have less to give
Total Cost of
Workforce (TCOW)
aka Labor cost
matter much more
than headcount.
NOTE: Cost goals
achieved with only
3.5% staff cuts

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Scenario Modeling to Reduce Turnover Rate
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© Human Capital Management Institute
Scenario means
turnover rate
must come
down
Scenario shows
reduced cost of
turnover for the
business
Scenario Target is
–5% Turnover
reduction each
year
Scenario: Turnover Rate reduction 25.3% annually to 16.8% annually by 2025

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Turnover Detail: Best-in-class Turnover Analysis and Metrics
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© Human Capital Management Institute

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Turnover Overview: Impact and Trends of Turnover
Key KPIs and Visuals by Location, Comparison with Targets and Forecast

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To schedule a planning session, contact:
Jeff Higgins, CEO
www.hcmi.co/SOLVE
Schedule Meeting
✉ jeff.higgins@hcmi.co | 📱 (714) 612-9897
Q & A

25.
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APPENDIX

26.
Workforce Planning Steps
Visualize the Workforce Planning process
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Tools and
Technology
Training
Skills and
Resources
Systems and Data
Workforce
Strategy
Human Capital
ROI
Current Forecast
Business Strategy
Strategic Plan
Annual Budget
External Market
Data
HR Inputs Business/Finance
Inputs
Selecting Key
Metrics
Financial
Goals/Data
2
3
4
5
6
7
8
1
Workforce Questions
Scenario Design
Demand Forecasting
Internal Supply
Modeling
Select Critical Roles
Workforce Action Plan
Demand-Supply GAP
Analysis
External Supply
Modeling

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Workforce Overview: Summary of Workforce with Actionable KPIs and Trends
Insights on Headcount and Compensation by Time and Work Location.

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Workforce Productivity Key Input Metric
Understanding Total Cost of Workforce (TCOW)
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=
Total Cost of Workforce
Total Cost of Workforce
Total workforce direct business costs + HR, including:
+ Employee compensation (salaries/wages, incentives, overtime, equity & other pay)
+ Contingent temporary / contract labor (costs)
+ Employee benefits and perks (costs)
+ HR function (costs e.g., recruiting, training & support)
+ Retiree or inactive workforce costs* (costs)
Why is TCOW important?
• Workforce costs are the largest cost (average 70% of operating
expenses)
• What gets poorly measured, gets poorly managed
• In growth: budgets, requisitions and position control leave too
many holes
• In decline: shows how much to cut
• Need for a metric to manage the complexity that is the workforce
• Existing cost control tools don’t work (what tools?)
– Status quo drives the binge (hiring) / purge (layoff) cycles
– Off-shoring/Outsourcing reduce costs but not competition
• How does TCOW Control Costs?
– Set targets to budget, forecast, benchmark or improvement goals
– Link to new hire requisitions, hiring freezes, bonus-incentive payouts
– Benchmark business unit and organizational performance
• Compare TCOW as a % of Revenue
• Compare TCOW as a % of Total Expenses
• 1% TCOW savings at a Fortune 500™ co. = $30 million
© Human Capital Management Institute

29.
Calculating ROI
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Analyzing expected results
© Human Capital Management Institute
• Calculate the Inputs and Outputs of the Program
➢ Consider costs in context of TCOW
➢ Consider whole talent management lifecycle
➢ Emphasis on financial impact
• Subtract Inputs from Outputs to get the total ROI
➢ Return Ratio = (Output – Input) / Input
• Compare multiple scenarios
➢ Include the cost of “What if we do Nothing?”
➢ Give a best case, worst case, and most likely

30.
Workforce Realignment/Planning Outline
30
What you can do to model the future workforce using data
“Leverage Data + Know Your Talent = Good Forecasting + Better Business Decisions”
• Optimize Workforce Size/Cost/Productivity
➢ Use Total Cost of Workforce (TCOW)
➢ Surgical cuts vs. “across the board peanut butter” cuts
➢ Reducing hours or salaries 10% saves more than a 10% employee cut
➢ For costs look at, contract + temporary Labor + open Jobs
• Build superior workforce strategy scenarios to stay ahead of the market
➢ Apply your workforce strategy (i.e. low cost workforce or top talent workforce)
• Strategic talent arbitrage (i.e. “Money Ball”, buy low, sell high)
➢ Re-deploy key skills/talent to fill needs
➢ Optimize internal talent to engagement and retain
© Human Capital Management Institute