Developing workforce capability is also called strategic workforce capability development, is about making sure that the right person is in the right job at the right moment. This means that there are not too many people available (overstaffing) nor too few (understaffing).
Workforce capability development thus solves staffing problems for today and for the future. Workforce capability development is becoming increasingly important for a number of reasons.
- Demographic changes: An aging workforce poses a number of different problems, including a lack of in-demand skills, reskilling challenges, and mass-retirement.
- Cost reduction: Increasing global competition forces companies to work smarter. At the same time, the aging workforce is a more expensive one – but not necessarily a more productive one.
- Talent management: Talented employees form a competitive advantage for the company. Having people with the right drive and lining up a talent pipeline to replace the aging group of senior management and executives in the company is essential.
- Flexibility: Today’s competitive landscape requires faster and more disruptive innovation. The revenue produced by products that are less than a few years old has increased tremendously in the last few decades. At the same time, the tactics that got us here won’t get us where we need to go next.
The goal of Workforce capability development is to have a workforce with the right size, shape, cost, and agility.
- The goal of size revolves around the number of vacancies. Too many job openings will slow the company down, while having too many job openings will mean the company is understaffed.
- The goal of shape revolves around having the required competencies needed today and tomorrow (in the form of succession planning).
- The goal of cost revolves around reaching an optimum in labor cost. Too much will bankrupt the company but too little will result in work not getting done.
- The goal of agility is about having a workforce that is lean and flexible and can adapt to changing market demands.
Strategic Workforce capability development therefore revolves around ensuring that the company’s workforce has the right size, shape, cost, and agility for the future.
Principles of Workforce capability Development
Workforce capability development is the dynamic between what we have today and what we need tomorrow. Our current (employee) formation is therefore relevant when we make decisions about tomorrow’s ideal formation.
Basic principles of strategic workforce capability development, are
- Strategic Workforce capability development is in line with the organization’s strategy. The organizational strategy is a long-term plan that dictates what the company strives to achieve in the next five to ten years.
- Good Workforce capability development follows the 80/20 pareto principle. 80% of the effect is achieved by only 20% of the work. When you engage in strategic Workforce capability development, focus on the organization’s primary functions – the ones that add most to the organizational results. Overhead and management are of secondary concern.
- What’s in the name: Workforce capability development is strategic. It focuses on tactical and strategic decisions and therefore has a long-term focus.
Workforce Capability Development Steps
Analysis of the current formation of the workforce
Workforce planning starts with the current employee formation. It answers the question about what people and skills a company currently has. There are two areas to explore when gauging the current formation of the workforce. These are quality of the workforce and quantity of the workforce.
Anticipate the future: Leverage scenario analysis to plot potential futures
It’s good to know where you are now. However, to be ready for the future, you need to have a sense of what could be coming. The future is impossible to predict, but you can create scenarios of possible future outcomes. These can help you create action plans in advance.
Analysis of the future formation of the workforce
The last step is to analyze the future formation of the workforce. There is a difference between the expected formation and the desired formation.