Strategic Workforce Planning & Analytics During University Sector Change10th Universities HR Benchmarking Conference1 November 2013

Ephraim Spehrer-Patrick, Workforce Strategy & Planning LeaderPacific

Olivia Tsen, Principal, TalentLeadership & Organisational Performance

MERCER 1

Strategic Workforce Planning & Analytics During University Sector Change

1. University Sector Context

2. Strategic Workforce Planning

3. Workforce Analytics

4. Case Study: OECD

Q & A

Agenda

MERCER 2

Strategic Planning... ... requires managing contradictions

Universities today face a range of contradictions … and tough choices

Have talent surpluses in some areas… skill shortages in other areasand

Value and seek diversity and specialisation… benefit from a cohesive cultureand

Want efficient structures and processes…

place growing emphasis on innovation and leadershipand

Are constrained by remuneration frameworks… need to retain top talentand

Desire to increase use of technology solutions

compete with online education providersand

Need to provide clear vision and strategy…

are less certain about some future challenges and changesand

MERCER 3

Dynamics Potential workforce & organisation impacts

University SectorDrivers for more strategic workforce management

• Difficulty attracting • Highly mobile workforce

(Gen X, Y and Z)• Loss of talent to

professional practice

• Differentiating as an employer• Inspiring leadership needed to attract talent• Casualisation of workforce• Ability to attract research funding and best

and brightest staff and students

Global Competition for Talent

• Demand driven funding• Increased competition • Cost constraints• Restructuring faculties /

schools /departments

• Diversifying revenue streams• Retention and engagement• Greater accountability for results• Clearer performance standards• Change management

FundingPressures

• Skill shortages• Ageing populations

Demographic Shifts

• Global mobility and recruitment • Loss of specialist knowledge• Reputational risks• Online learning and teaching capability

• Skill shortages in specialist areas

• Ageing population• Technological

innovation

Demographic Shifts

MERCER 4November 4, 2013

Strategic Workforce Planning & Analytics: Mercer’s Point of View and Approach

MERCER 5

* According to research from Bersin & Associates, 2011: “developing advanced workforce planning capabilities”

Crucial process – helps HR leaders prioritise Science + Art

One of the least defined HR processes /disciplines

Ranked one of the highest priorities *

Analytics +Planning

Strategic Workforce Planning What is it?

MERCER 6

Strategic Workforce Planning What it is – and what it isn’t

Resource Allocation

Performance & Development

Process

Career Planning

StrategicWorkforcePlanning

Operational Strategic

Functionlevel

Individuallevel

It is

future-oriented

goes beyond the one-year horizon

focused on critical workforcesegments

MERCER 7

Workforce planning is a systematic process for identifying and addressing the gaps between the current and future workforce resources and needs.

Strategic Workforce Planning Defined

It provides a rational basis for prioritising, developing, and funding the people practices to support the university strategy and objectives.

Right LocationRight People Right Time with the Right Cost

MERCER 8

Funding / Budget Funding decline or increase

Increasing productivity requirements

Increasing revenue

Programs / Courses Policy changes

New programs or courses

Consolidation of programs or courses

Operational New technology

Process improvements

... to deliver specific outcomes

Workforce scenariosthat focus on…

3 – 5 year scenarios

Strategic Workforce Planning... ... starts by understanding where the university is headed, and the turns it could take.

Re-calibrating for change

Increasing productivity

Improving performance

Investing for future expansion

Building capabilities from within

Costs Counts

Capabilities Structure

Locations

MERCER 9

Strategic Workforce PlanningKey process steps

Workforce Solution Design (Workforce Plan)

Workforce Analysis (Supply, Demand & Gap)

Strategic Setting & Preparation

Understand organisation strategy

drivers

Analysing current workforce structure

Identifying critical capabilities and roles

Current & Future Workforce Supply

Current & Future Workforce Demand

GAP ANALYSIS

LOCATIONPEOPLE TIME/COST

Buy Solutions(recruiting, co-& outsourcing, partnering)

Build Solutions(developing, retaining, insourcing)

Redeploy Solutions(exit, transfer, turnover)

A Workforce Plan describes actionable solutions and their impact on workforce gaps / risks.

STRATEGIC WORKFORCE

PLAN

MERCER 10

Workforce Planning – Review of last decadeFour Archetypes of Alignment

Slow to react

Dem

and

01‘-02‘ 03‘-04‘ 05‘-06‘ 07‘-08‘ 09‘-10‘

Overreaction

Dem

and

01‘-02‘ 03‘-04‘ 05‘-06‘ 07‘-08‘ 09‘-10‘

Business Demand Workforce Portfolio

Cautious

Dem

and

01‘-02‘ 03‘-04‘ 05‘-06‘ 07‘-08‘ 09‘-10‘

Alignment

Dem

and

01‘-02‘ 03‘-04‘ 05‘-06‘ 07‘-08‘ 09‘-10‘

e.g. Energy /Telcos

e.g.Banks /

Consulting

e.g. Automotive/

Manufacturing

e.g.Services /

Investment Banks

MERCER 11

Current State

Traditional Planning Scenario Planning

How should we translate our organisation strategy / plan to future workforce demand scenarios?

Appropriate for long-term planning and to force “out-of-the-box” thinking.

FUTURETODAY

Option AFunding

Increased

Option BFunding

Maintained

Option C Funding

Cut

Current State

Appropriate in relatively stable environment.

“Best” case (+10 %)

“Base”case

“Worst” case

(-10 %)

FUTURETODAY

Current State

MERCER 12Mercer / The Conference Board, 2010

Level 1

Level 2

Level 3

Level 4

Budget driven headcount planning

Workforce dashboards

Strategic workforce

planning & analytics

Humancapital planning

• Headcount data (FTE) • Retrospective, static analysis and

reporting (e.g. cost, basic demographic data)

• Internal and external labour market analysis data

• Benchmarking (e.g. attrition, productivity, HR processes)

• Shared view on critical workforce segments, capabilities + gaps

• Predictive models and scenarios

• Integrated in organisation strategy process

• Organisation-wide governance (e.g. COE for Analytics and Planning)

OPERATIONAL STRATEGIC

Maturity of Workforce Planning & AnalyticsDifferent levels of maturity in organisations

MERCER 13November 4, 2013 13

2013 Mercer Research with the World Economic Forum (WEF)GLOBAL GOOD PRACTICE REPORT

MERCER 14November 4, 2013 14 14

2013 Mercer Research with the World Economic Forum (WEF)TALENT INVESTMENT RISING

FEW HAVE HIGHLY EFFECTIVE TALENT PLANS

MERCER 15

61% of universities have a strategic workforce plan

PREVALENCE OF A WORKFORCE PLANNING STRATEGY

MERCER 16

Of those that have a plan, most have a time horizon of 1-5 years

PERIOD COVERED IN A WORKFORCE PLAN

MERCER 17

Workforce planning strategies are heavily dependent on student demand for courses

CONSIDERATIONS WHEN DEVISING A WORKFORCE PLANNING STRATEGY

MERCER 18November 4, 2013

The Analytics Journey

MERCER 19

Reactivechecks

Simulations& forecasting

Correlations

BenchmarksOn-goingreports

Causalmodeling

Anecdotes

Measurement continuum

Moving from ‘I Think’ To ‘I Know’

Least powerful

Most powerful

MERCER

20Mor

eSo

phis

ticat

ion

Les

s50% of universities most frequently use basic workforce analytics. The remaining 50% use external or internal benchmarking.No universities are using more advanced analytics

CURRENT ANALYTICS

Basic analytics such as ongoing headcount/turnover reports are most frequently used

MERCER 21

Projections and forecasts are approaches that will enable universities to make better workforce decisions

Mor

eSo

phis

ticat

ion

L

ess

Better workforce decisions are made as a result of more sophisticated workforce analytics such as future forecasts and projections based on current data

WORKFORCE PLANNING

MERCER 22

Vice Chancellors and Senior Executives, Managers and HR are all interested in the use of workforce analytics

INTEREST

Survey participants strongly agree that HR leaders and Senior Executives and VCs are interested in workforce analytics (e.g. projections, simulations, predictive modelling)

MERCER 23

HR functions have the skills to conduct basic analytics

Basic Analytics

Sophisticated Analytics

HR SKILLS

• Most HR functions have the skills and capabilities to conduct basic workforce analytics such as ongoing reports and benchmarks

• However, many lack the skills to perform sophisticated skills such as projections, simulations and predictive modelling

Strongly disagree

MERCER 24

Workforce analysis is generally completed by a Centre of Excellence (CoE) consisting of ~0.5 – 2 FTEs

RESOURCING

23% have workforce analytics decentralised throughout the university

9% are currently decentralised but have plans for COEwithin 12 months

68% of universities complete workforce analysisin a Centre of Excellence

76% of universities have 0.5 – 2 FTE responsible for workforce related analysis

4% of universities have 0 FTE responsible for workforce analysis16% of universities

have 3 – 5 FTE in workforce analysis

4% of universities have 6 - 10 FTE responsible for workforce analysis

MERCER 25

Universities want to use workforce analytics to support workforce planning and drive efficiency gains

REASONS FOR FUTURE USE OF WORKFORCE ANALYTICS

MERCER 26

FOUNDATIONAL ADVANCED

Output

Information

Uses

Tools

Counts, rates, and tabulations

WHAT is happening: What is our turnover rate? How many promotions did

we make? What are spans of control? What is current productivity?

Reporting (internal and external) Tracking progress toward goals Monitoring trends

Business intelligence

Proven cause-and-effect relationships

WHY | HOW to change it: Why do people quit? What experiences are linked to

advancement? What are optimal spans? How can productivity increase?

Analyse alignment Informing policy decisions Direction to achieve goals

Statistical modeling techniques

The Journey: Two Categories of Measurement

MERCER 27

• Every organisation has an internal labour market –either by design or default

• People come in, advance, and leave

• Employees play to the organisation’s values… …rules…rewards

• Leadership’s choices and investments produceexceptional, nominal, or negative effects

• Descriptive analysis

The Concept (1 ) ILM Mapping

• Causal analysis (drivers)

(2) ILM Analysis®

Internal Labour Markets (ILM) Combining Foundational (1) with Advanced Analytics (2)

Promotions

7

6

4

8

5

3

HIRES EXITSCAREERLEVEL

Lateral Moves

Total Employees

MERCER 28

The real power of ILM analysis® comes from measuring and modeling the drivers of these talent flows

11

72

125

190

312

116

Hires17

49

123

184

227

86

Exits

Promotions

7 517

6 640

4 963

Level 8 168

5 830

Careerlevel

3 383

Lateral moves

234

45

341

186

81

38

16

81

85

134

129

Totalworkers11

72

125

190

312

116

Hires17

49

123

184

227

86

Exits

Promotions

7 5177 517

6 6406 640

4 9634 963

Level 8 168Level 8 168

5 830

Careerlevel

3 3833 383

Lateral moves

234

45

341

186

81

38

16

81

85

134

129

TotalworkersKnow who

you are selecting

Know what you are

rewarding

Know what accounts for performance differences

Know what retains

employees

MERCER 29

Advanced Analytics: Example for ILM Analysis®

Previous surveys of perceptions

suggested that pay and workload were most critical to employee

commitment.

The analysis of actual behaviour showed

that career opportunities most affected retention.

Previous surveys of perceptions

suggested that pay and workload were most critical to employee

commitment.

The analysis of actual behaviour showed

that career opportunities most affected retention.

The models on which these results are based control for individual attributes, organisational factors, and external influences.

Disguised case example

MERCER 30November 4, 2013

Case Study: Organisation for Economic Co-operation and Development (OECD)

MERCER 31

People Imperatives Business Situation

Increasing importance of generalists to complement existing specialist staff

Develop a more efficient and flexible talent deployment model

Maintain engagement under increasing cost constraints

Global economic power shift (G7 to G20) resulting in increasing breadth of member needs

More demands for multi-disciplinary research

OECDThe Value of Drivers Analysis

MERCER 32

ILM Map (3 year timeframe)

From outside | from temp role Voluntary | total

1|41|4

17|617|6

19|919|9

76|676|6

40|140|1

7|07|0

5|05|0

9|99|9

17|2417|24

9|129|12

7|187|18

3|103|10

20|5620|56

12|4412|44

5|145|14

3|93|9

6|206|20

10|2710|27

4|94|91

18

27

21

2

15

30

12

4

Promotions

1|51|56969

109109

310310

249249

282282

4646

446446

339339

121121

5151

B5, B6

B4

B3

B1, B2

C

Grade Hires: 200|68Hires: 200|68

<9>

<10>

<16>

<5>

<3>

<Laterals: 69> Exits: 71|212Exits: 71|212Average active employees: 2,022Average active employees: 2,022

10

A6, A7

A5

A4

A2, A3

A1

<2>

<3>

<7>

<13>

<1>

MERCER 33

-85%

-77%

-48%

-47%

-44%

-26%

-17%

101%

-100% -80% -60% -40% -20% 0% 20% 40% 60% 80% 100% 120% 140%

Changed Department (within grd)*

Supervisor vs. Individual Contributor

French citizenship

Changed from "temporary"*

Supervisor's span (3+ Ees)

Tenure (5+ yrs)

General experience/age (5+ yrs)

Pay increase

Annual salary

Promoted this year

Changed job or job family (within grd)

Rating: Outstand vs. Satisfactory*

Percentage difference in probability of voluntary turnover next year

More likely to quitLess likely to quit

Turnover Drivers Analysis Importance of lateral movement, supervision, and performance

No effect

The models on which these results are based control for individual attributes and organisational factors. All effects are significant at the 5% level unless otherwise noted. Models account for Departments, Grades and Job Families. *The effect is significant at the 10% level.

MERCER 34

-64%

-30%

-22%

14%

30%

46%

68%

93%

137%

176%

-100% -50% 0% 50% 100% 150% 200%

Promoted this year

Annual salary (€10k+)

General experience/age (5+ yrs)

Changed job or job family (within grd)

Tenure

Level to supervisor (1+)

Supervisor's own span (2+ Ees)

Took management training

Rating: Outstand vs. Satisfactory

Rating: Excellent vs. Satisfactory

Changed Department (same grade)

Supervisor vs. Individual Contributor

Percentage difference in probability of promotion next year

More likely to be promotedLess likely to be promoted

The models on which these results are based control for individual attributes and organisational factors. All effects are significant at the 5% level unless otherwise noted. Models account for Departments, Grades and Job Families. *The effect is significant at the 10% level.

Progression Drivers Analysis Mobility & supervision also strongly linked to employee success

MERCER 35

BUILD HR Strategy

Workforce Planning & Analytics

RUN Employee Lifecycle Management

Recruitment, Selection

&Onboarding

Compensation&

Benefits

PerformanceManagement

Administration (Payroll, Employee Benefits, Time Mgmt, Mobility, etc.)

Development&

Mobility

Retention &

Exit Mgmt

Talent Management

SWFP & analytics was key input to

align programs along the employee lifecycle

SUSTAIN Communication, Change Management, Organisational Development

SUPPORTOrganisation & Roles HRIS (eHR)

Summary of Insights Impact on rewards, mobility, development and communication

MERCER 36

The crux of workforce planning is enquiry, not just number crunching.

You need both broad directional insights and granular details about your workforce.

Your workforce plan should tell a story. Even basic analysis can provide some clarity. Leverage the data you’ve already got.

Make process and tools simple and efficient to use, and find the right people (skills) to support the process.

Workforce planning is not an “event”; build capabilities over time; don’t do it all at once.

1

2

4

3

5

Closing thoughts and lessons learned

MERCER 37

Principal, Human Capital Strategy & Workforce Planning Leader, Pacific

Phone: 02 8864 6463Email: ephraim.spehrer@mercer.com

Ephraim Spehrer-Patrick

Principal, Leadership & Organisational Performance

Phone: 03 9623 5223Email: olivia.tsen@mercer.com

Olivia Tsen