Strategic Human Capital Planning: The Missing Link

by Mary Lou Lindholm
Lindholm & Associates

What is Workforce Planning?

It is easy to oversimplify the concept of workforce planning; in fact, some organizations do just that, assuming that workforce planning often will fix all of the human resources ills of an organization. Others formulate their plans in a vacuum, often isolated from other planning processes involving strategic direction, budget, and performance management.

To succeed, workforce planning must be an iterative, long-term, continuous, integrated business management practice producing a seamless alignment of mission, goals, budget, customers, employees, and results. It requires a careful assessment of the organization’s purpose (mission), what it is striving to achieve toward that purpose (strategic plan and goals), what interim steps it expects to perform (annual performance plans), what competencies it requires to perform these tasks (human capital), and what competencies it lacks (human capital needs). Workforce planning assists in identifying the gaps and gap closure strategies. If the vital front-end planning is not adequate, the back-end workforce planning will fail, as will any implementation steps resulting from the workforce plan.

The U.S. Office of Personnel Management defines workforce planning as “the process of ensuring that the right people are in the right place, and at the right time to accomplish the mission of the agency...More specifically, workforce planning is a systematic process for identifying and addressing the gaps between the workforce of today and the human capital needs of tomorrow.” (Source: OPM Workforce Planning Web site)

Agencies often miss the critical linkages which must be identified, strengthened, and built upon, leading to the problems experienced at agencies “X,” “Y,” and “Z” below.

Agency X contracted for a sweeping workforce planning and restructuring review, analysis, report, and recommendations. However, as work got under way on the project, it became clear that critical linkages among mission, strategy, goals, objectives, budget, people, and results did not exist and that the agency was moving in a number of different directions at the same time. The agency’s core business document – its Five Year Strategic Plan - was out of date and undergoing significant revision and overhaul. In the meantime, the agency’s leadership body was implementing provisions of a multi-point strategic vision statement. Other parts of the agency were managing against existing business and performance targets and standards.

Agency Y enlisted external support to conduct workforce planning. While the contractor team was working with the human resources staff, the agency’s strategic management office was conducting its own workforce analysis.

Agency Z contracted with a data analysis software provider and assumed the vendor would generate “the answer” and provide it to the agency.

In each of these cases, drawn from actual experiences with organizations attempting workforce planning, the agency did not engage in meaningful planning to deliver the real answers the agency needed.

Mapping a Course to Effective, Meaningful Planning

Organizations frustrated by their workforce planning efforts typically have not connected the dots from the mission to the people. While annual performance plan cycles in government under the Government Performance and Results Act (GPRA) and the annual workforce restructuring plans submitted to the Office of Management and Budget (OMB) are helping to push agencies toward an integrated planning approach, there is plenty of road leftto be traveled. Effective planning requires the linkage – through comprehensive strategic human capital planning – of mission to people, through these strategic human capital management steps:

Mission: For what purpose does the organization exist?

Strategic Plan: A set of goals over the next five years that the agency will pursue to fulfill its mission or advance its purpose.

Annual Performance Goals: Annual targets set by the organization to advance it toward its five-year goals.

Annual Performance Report: A review of the prior year’s progress, success, failures, or adaptations.

Human Capital/Workforce Planning: An analysis of the competencies, experience, skills, knowledge, and specialties the agency needs to carry out its performance plan. This planning will identify the agency’s existing human capital, its projected losses in future years, its new competency requirements, the supplemental workforce needs (blending permanent workforce with contingent staffing needs), and the tactics it will employ to fulfill its needs.

Human Capital Strategy: The implementation blueprint for actualizing the agency’s human capital against its mission.

When agencies successfully address and link all of the above, they are well on their way to achieving true workforce planning. Such agencies are then in a position to effectively deal with program redirections, mission realignment, human capital issues, and other concerns in a practical and timely manner.