Workforce Planning: Strategic Insourcing is your Competitive Advantage
HCM Advisory Group, November 2011
A white paper from Human capital theory was developed by Theodore Schultz and Gary S. Becker in the early ’60s (Schultz, 1961). Their central thesis states that education enhances a person’s skill level and thereby his or her value to an organization. In today’s business environment, “human capital” refers to the knowledge, skills and ability that reflect the accumulated value of an employee’s education and experience. To be “right-sized,” an organization must have the ability to manage the inventory of human capital assets. This isn’t a simple task, as it requires significant planning. Workforce planning is used to align the needs and priorities of the business with those of its workforce to ensure it can meet strategic objectives. Many organizations undertake a rigorous analytic approach employing predictive analysis to estimate talent gaps, forecast operational and recruiting budgets and to manage attrition.
In 2009, Madeline Laurano with Bersin & Associates found that 92 percent of companies report some level of workforce planning. However, only 21 percent of these companies take a strategic, forward-looking approach to their workforce planning initiatives. Laurano states that compared to other departments, HR is less focused on its own internal workforce planning. As HR and learning and development functions seek to increase their worth and brand equity within an organization, they will need to ensure the alignment of their initiatives with overall business strategy and plan for the supporting workforce.
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