The Workforce Expert

Welcome to the Workforce Expert

Welcome to the Workforce Expert! This blog is dedicated to the practice of workforce planning in organizations. One can't really open an HR magazine or web site these days without some reference to workforce planning, and the number of conferences, workshops, articles, etc. dedicated to the topic has grown immensely. In this blog, I will attempt to separate some of the hype (which there is a lot of) from the reality and give a relatively balanced view of what is and isn't working out there.

This blog is targeted towards practitioners, but consultants are certainly welcome to join the conversation. Being one myself, I know the valuable contribution they make to the field. That said, I want the tone of this blog to be civil and professional, and I reserve the right to strike from the record any posts that don't adhere to that.

Over the next several weeks, I will attempt to put forward some of the foundations of what I have learned about doing workforce planning over the past 15 years or so (yes, it has been around that long). These are meant to be conversation starters, but certainly if there are other topics that readers would like to see addressed, please feel free to suggest!

Enjoy!

Brian

Should Workforce Planning Be Part of Talent Acquisition?

For those of you who have watched the evolution of workforce planning as a function for a long time, you will remember that one of the places that it initially sprang from was Recruiting (or Talent Acquisition for Talent Management fans). I would argue that in a simplistic way the first time a recruiter asked a manager "how many people do you need next year", that they were doing workforce planning. But I am talking more specifically about the trend as workforce planning began to evolve that it was housed in (or the director was recruited from) the Recruiting function. That is not at all to discount those of us who were using Markov chains or Systems Dynamics models many years ago to try to do systematic HR planning of course...

Lately, I have worked on a number of HR Transformation projects where the question has arisen as to where workforce planning should report. And again I am seeing a number of organizations tend towards putting it in the Talent Acquisition function. Certainly this has some appeal, as one of the solutions to workforce planning problems is often recruiting or perhaps some form of contingent labor (which is also increasingly residing in Talent Acquisition). Certainly as an organization is getting its workforce planning efforts off the ground, these are 2 of the more common "answers" to workforce planning questions.

But as I have discussed in other posts, workforce planning can lead to an incredibly diverse set of questions and answers in terms of Human Capital Management, ranging from structure changes to training implications, and from reductions in force to automation opportunities. In many ways it is a fundamental underpinning of the organization's Human Capital Strategy. So should it report to the CHRO? Or maybe even the organization's Strategic Planning function?

The truth is, I don't think there is one answer to the question of where workforce planning should report. I think there are lots of reporting relationships that can work. Now I also believe that the CHRO doesn't have to report to the CEO for the function to have impact, but that is for another post...

My belief is wherever workforce planning sits on the organization chart, there are several important characteristics that must be present for it to be successful:

1) Connection (Access)- the function needs to be able to work directly with the right stakeholder to understand problems, access data, and gather insight

2) Visibility - the results of its analysis must be seen by those who need it to make decisions

3) Credibility - its position in the organization must not derail (and hopefully should enhance) its credibility and maximize the chances that people will use its outputs

4) Delivery System - as mentioned in previous posts, it is unlikely that the workforce planning function itself will have the resources to work directly with every organization who needs it, so it needs an effective mechanism to deliver its insight and analysis (could be business unit partners, etc.)

5) Capability - the function needs to be appropriately staffed with the right expertise and business knowledge to be effective (and in some organizations, its reporting relationships could have a big impact on the resources it gets)

6) Influence - this is a function both of the people / approach that the function has / takes and its positioning in the organization; this often relates to #3

Depending on your organization, there may only be one reporting relationship that can achieve all of these, but you are best qualified to judge that. In my view, ensuring that function is best positioned to deliver value, wherever that may be, is what is important.

Finding the Best Position for Work

One of the advantages of having a strong competence in workforce planning is the ability to derive answers to many “people” questions using the plan. There are a number of techniques that have evolved over the past several years that are adding value to organizations. I wanted to review one of those briefly.

Once a company has established the basics in terms of workforce planning, there is an opportunity to move to more workforce optimization. A common question in workforce optimization is “Am I doing work in the right place”? Not the right place in terms of geographic location, but in terms of do I have the right position that is doing the work? “Right position” being defined in this case as the right level of skill at the lowest cost with the appropriate availability. In terms of skill, you are looking for the level of skill that ensures proficiency in the task. While some tasks benefit proportionally from higher level skills, in some cases a higher level skill doesn’t lead to more productivity. So it is important to understand what the particular task you are analyzing requires. In terms of cost, given the choice most organizations would take the lowest cost to get the performance they need! This analysis uses that principle. It is important to understand again what paying more buys you. What is the level of investment where you are no longer getting a return? Just as in some cases more skill doesn’t necessarily lead to more benefit, in some cases more money doesn’t buy more productivity. Availability is also a concern. While a position might be the right one in terms of balancing skills and cost, if incumbents are hard to find and hard to train, the benefits will be quickly lost.

To do this analysis well, software helps. Being able to mine different positions to understand the skill and proficiency requirements as well as the associated costs in an efficient manner is the key. But it can be done via Excel or other similar basic tools. Using these usually requires some “offline” analysis to help narrow the universe of positions being analyzed, but it can be done. But in many cases the analysis is not that simple. Many positions in a company perform multiple functions and it is unlikely that the analysis will lead to a 1:1 best fit. In other words, it is unlikely that you will find another position in the company that is already structured in such a way that it is simply better to take a particular task. In many cases, finding the best fit requires restructuring positions to get the right portfolio of work associated with the right position. This is a much more advanced analysis and generally requires specialized software to do well. (See previous posts on “Techniques that Make a Difference”).

While getting into the detailed methodology behind this analysis is outside the scope of this blog, one can certainly see the applications. Reducing costs is an obvious one – you can find the cheapest way to get your needs met by using this technique. But there are other applications such as ensuring you have the best talent in critical positions, examining outsourcing options (external options in terms of cost, skill, and availability can be analyzed along with internal ones), and a host of others.

How Much Can Be Covered with Overtime?

Based on the last post, there were some questions regarding how much volume variation can be covered by overtime as a general rule. In other words, how much extra work can I put on my staff before it starts to lead to some of the outcomes I said you want to avoid in my last entry.

The answer to that is of course "it depends". It depends on a number of variables and to some degree your culture. How much overtime is regularly done by your staff? Is your culture an "8-5" culture? Or is it well past dark and your parking lot is still full? What kinds of compensation are in place for overtime? (money, comp time, etc.) Do managers encourage or discourage it? (in some companies / positions, there are processes in place to try to minimize overtime). This just a sample of some of the questions one might ask. I bring these up because they are important context, but back to the question we started with...

I have seen clients range in regular overtime from < 1% to 20% on a sustained basis. But for most organizations, the target is likely much lower than 20%. The first step is to identify what is needed in terms of overtime. This analysis comes from looking at volume patterns and determining the "best fit" line for staffing. Usually I tell clients to start with the number of people needed to handle your average volume in a given month. Then look at surges in volume and their frequency and magnitude. Do you have a rush in activity at the end of every month? If so, how does that rush impact your costs? Would the cost of hiring additional resources offset some of that increased cost? Or could you not feasibly staff to that level? Some of these are judgment calls to be sure. But I encourage planners to model out various options related to addresing volume spikes. What happens at 3% overtime? 5%? How does it change your costs? And then look at how realistic these scenarios might be.

One way to test the potential impacts is to try to correlate turnover with the amount of overtime in a given unit. You should be tracking both over time and turnover, so it is a matter of correlating the potential relationship between the two. Looking at multiple business units should provide a good sense of what some of the relationships between overtime and turnover might be. You can also usually get a good sense of the break points - the lines where increasing overtime starts to impact turnover. It is also important to look at differences between business units, position types, etc. - one size may not fit all in terms of setting overtime thresholds.

A critical element of that analysis is looking for lag effects. Turnover usually doesn't spike immediately after volume increases, but usually there is some lag of 2-4 months. So it is important to account for these lags in your calculations. Of course as I discussed in the last entry, turnover isn't the only indicator, but you can do the same sort of analysis with any of the factors we discussed last time.  

Once targets or limits on overtime are set, your workforce modeling becomes more straightforward. Decisions around when to hire or when to implement other strategies for dealing with volume spikes are more clear. Even decisions such as when to put in interventions for reducing stress or building morale can be better understood by understanding where your potential break points are where negative impacts might come from doing more overtime.

As mentioned at the start of the post, your answers in this area will likely differ a great deal from another company, so it is important to do the analysis for your specific needs.

How Do You Know if Your Staffing Levels are Correct?

We have talked quite a bit about techniques to figure out what staffing levels you should have in a given function. But how do you know if the numbers are right? Certainly discussions with managers can help, but there are other metrics and signs that can be used to understand if your staffing levels are correct and sustainable.

One of the challenges with determining correct staffing levels is that having the wrong levels won’t always immediately lead to work not getting done. If we’ve learned anything from years of downsizing, it’s that workers have a tremendous ability to absorb additional work on a temporary
basis. So often in the course of downsizing, productivity at the gross level will seem to go up. But as we also know, it is also typically not sustainable and over time, volume may start to fall, employees may start to leave the organization, and/or stress levels may increase causing other workforce issues.

So when an organization is trying to understand if its staffing levels are sustainable, I suggest they look at metrics such as:

 

• Increases in absenteeism
• Increases in turnover
• Decreases in volume / output
• Increased unit costs or increases in materials usage
• Decreased quality / increased error rates
• Increased internal transfers
• Increased employee relations incidents / issues / disciplinary action
• Increases in use of employee assistance program or medical leave requests
• Decreases in employee satisfaction scores

Generally, it is most helpful to look at this data by function or departments to understand where the specific problems are. It can also be helpful to look at the data by position to further identify any potential problems.

It should be noted that these metrics in and of themselves do not prove that the issue is staffing levels, but they can certainly be an indicator. Further investigation will help drill down to the root cause and help to identify appropriate remediation.   

Calculating Risk in External Hires

As some companies move back into hiring mode, I am once again beginning to see a dynamic that has always concerned me in terms of hiring practices – automatically valuing the resume of potential external hires over those of internal applicants for a position. What does this have to do with workforce planning? I’ll get to that, but first…

When an organization needs to fill a position, they are often confronted with the age-old “build vs. buy” question. Do I promote or transfer someone internally or do I hire from the outside? To be fair, when there is clearly a well-qualified internal candidate, most organizations will give them that opportunity unless there is a compelling reason to look outside. My concern stems from when you have an internal candidate or candidates that are close to the required qualifications or maybe have some developable gaps and at the same time external candidates that appear to be qualified. Many organizations will lean towards the external applicant with the argument that they are more qualified. But I think there is an essential factor that is often not considered – the risk of that external candidate not being able to perform in your environment.

With an internal candidate, you have a known variable. You know whether or not they can get things done in your environment, your culture, and your context with your approach to management and resourcing. You know their contributions vs. the contributions of their team to the success of a unit. You know not only if they get things done, but how they get things done. And you know what their gaps really are. There is a great deal of research out there that says both that there is a high failure of external hires at senior levels (how high depends on which research you believe) and that the source of that failure is often the inability to fit the culture or to get things done in that new environment. The bottom line is while you can be very disciplined in terms of assessments, reference checks, etc., you will never know about an external candidate in the way you will know about the internal ones. So how do you factor that into your hiring decisions? I encourage companies to assign a weighting to that risk and to use that weighting to discount what they see on a resume. Then compare the development gaps that the internal candidate has vs. the risk of what you don’t know about the external candidate. This often changes the calculus significantly! As I said, there are often legitimate reasons to hire an external candidate over an internal one, and in some cases, the external candidate is significantly more qualified, so it makes senses even when you acknowledge the risk.

Back to workforce planning. You may remember in a previous post I talked about things like Time to Replace (Time to Fill + Time to Proficiency) and how that is used in workforce planning calculations. When looking at external hires, risk of non-performance needs to be factored into this calculation. In addition, new hire turnover is a metric that all companies should understand. That is, how many of your new hires turnover in a short period after joining? (I usually look at 30 days / 6 months / 12 months) Do these rates require a different calculation for Time to Replace or do they give you a different staffing picture? This is a variation on calculations that you may already be doing. Again, the goal is to give you as realistic of a picture of your ability to address staffing issues as possible, and having a realistic understanding of the dynamics around external hires is part of that picture.

HR Data Mining

Today I wanted to address a topic related to workforce planning – HR Data Mining. While this topic is not new, I have seen some increased interest in it lately and so I wanted to touch on a few points. Data mining as a field has been around for a long time, but it is really only in the past decade that the practice has received much serious attention in HR. In 2000 and 2001, I was involved in a few projects focused on creating HR Data Warehouses and being able to mine that data. The focus at that time was on integrated Talent Management, and particularly on looking at turnover and succession issues and trends. We were trying to find predictive patterns that could both tell us when we had an issue and help us understand where we had untapped potential (sounds familiar…)

Since then I have seen or been involved in a number of interesting data mining projects. I worked on one, for example, where we looked at performance reviews at the one year mark for new employees and tried to correlate the feedback there with what was said about that employee when they were a candidate. The company was experiencing issues with turnover and failure to perform in the first year of employment. What we found was that what was said during the interview process was pretty much exactly the same as what was said on the first year performance review, but usually stronger. For example, if concerns were raised about the flexibility of the candidate or their ability to adapt, the first year review noted that as a weakness. Same for strengths. Like many organizations, this company tended to “forget” what it learned about the employee in the interview process and on day one the candidate became “employee 123” in a particular role with no history. Contrast that with another client who took what they learned from the interview process and developed a plan for both leveraging the strengths and addressing the weaknesses identified in the interview process. No surprise, that company had much stronger performance and retention of their first year employees.

This is just one very simple example of HR data mining. There are many other potentials:

¡  Performance Data

• Company Strengths & Weaknesses
• Areas for HR Intervention
• Retention Issues
• Management Issues
• Succession Issues

¡  Development Data

• Capability Gaps
• Retention Issues
• Succession Issues

¡  Recruiting Data (especially correlated with Performance Data)

• Critical Success Factors
• Selection Issues
• Areas for HR Intervention

Again, this is not an exhaustive list. This data is certainly invaluable in helping HR determine how to allocate its resources. But it can also be used in workforce planning in a number of ways. Similarly, data that we traditionally use in workforce planning (such as mobility information) can be used to mine patterns that would be helpful to planning other HR processes. Sticking to the mobility example, we can mine patterns of movement and promotion and correlate those with performance data to understand what factors lead to successful promotions, and then where we might have untapped potential or where we can increase our chances of success by following those patterns. Again this is a simple example, but powerful in its application.

Unfortunately this type of data mining does require the right systems architecture in place. The good news is that more companies are closer to this than ever. As workforce planners, we have an opportunity to both leverage this data for our work and to help leverage our data to help the rest of HR plan effectively.

Re-Visiting Workforce Planning as a Line Function

Last year I did a post about whether or not workforce planning would become a line function. At that time I posited that while certainly there would be more adoption by the line, that HR will still have a significant role in doing more advanced modeling and in providing tools, training, and coaching. During that time, I have seen some interesting trends that change my view a little, so I thought I would update that perspective.

One of the most interesting trends is the advancement in business intelligence / decision support software. While not specific to workforce planning, these tools continue to evolve and are both more powerful and more accessible to the average manager. I have seen organizations leverage these tools to give managers access to key workforce metrics and the ability to run basic scenarios related to workforce planning. I have seen some good examples of this as the "pull" from managers related to workforce planning increases. I see an increased emphasis from line mangers on being able to examine different workforce scenarios, and as I have mentioned in previous posts, there is an increasing desire to get more insight into productivity, costs, and workforce options. Part of this I believe stems from the hesitance on the part of companies to overhire, and certainly from a desire to be more nimble and ready should anything go wrong from an economy or other perspective.

I have also seen some organization take a novel approach to enabling the line to be more self-sufficient when it comes to workforce planning. These organizations have essentially put "strategy grids" in place which give the line manager direction on areas that they should potentially examine based on the results of their workforce planning. Most of these are based on your typical "9-box" type grid and give direction that says if your workforce planning results fall into this category then look at strategies associated with that particular issue or trend. For example, if the workforce planning results for a particular division shows that there is a surplus of talent in a given area, the manager would be provided with questions and strategies on how to deal with employee surplus. Certainly HR still intervene as necessary and provides ongoing coaching, training, expertise, etc.

One trend that has not been so positive is also driving a push in the direction of workforce planning as a line function. That is the difficulty that many HR organizations are having getting a workforce planning function off the ground. In spite of significant focus in the HR press and the many resources available, I still see too many HR organizations move too slow and not be able to provide enough of the more advanced analytics and training that the line is demanding. As with anything, if the line can't get it from HR, they will find their own way. HR needs to focus on moving up the maturity curve more quickly.

Bottom line, things have advanced more quickly and pushed further towards line enablement than I would have expected. I am not saying that this is a negative trend, but I think it does create a greater possibility that the line will "own" workforce planning than I would have once thought...

Change Management for Workforce Planning

Since my last post, a number of people have asked about the journey to get to where workforce planning actually changes decision-making. A number of those who asked have workforce planning in place, but aren't seeing that change as of yet. In talking with these folks, there were a number of common themes that I thought were worth mentioning.

Probably the most common issue that I see is the "build it and they will come" mindset. Planners spend a great deal of time ensuring they have the right analysis and getting it out to key stakeholders with the assumption that they will understand the utility and application and begin to make better decisions. Even with well-intentioned decision makers with an inclination towards numbers, this is rarely the case. Like when you first started looking at workforce planning data, decision makers need time and coaching to help them understand things like:

1) What does this data mean?

2) What things should I act upon and what things should I just watch?

3) How do I know if I am better or worse in a given area than my competitors / industry?

4) What should I do about a given piece of data that looks troubling?

5) How do I know this is accurate enough to make decisions on?

6) What would happen if I changed "x" or "y"?

All of these are common questions / reactions from decision makers and there are many more. While you certainly could put these decision makers through some sort of training class, in my experience there are more effective ways to address these concerns. In many cases, enabling the HR partner that they work with on a regular basis to help them understand, analyze, and determine action plans for the workforce planning data is one of the most effective approaches. It leverages that trust that has been created and helps ensure a more open dialogue - decision makers won't be hesitatant to ask questions that may seem basic, and are more likely to trust what their existing partner has to say (assuming that credibility and trust have already been built).

Another way to approach it is to give the decision makers the tools to actually "play" with the workforce planning data themselves. This will generally help them build a comfort and will spur them to ask questions that they need to ask. But it should also give them a chance to play with the data and see how different interventions change the results. Of course this can be paired with training and coaching (and is usually more effective when it is).

I have also found that having the leaders (at whatever level you are focusing on) learn together is another effective strategy. Having leadership sessions facilitated by the workforce planners to help leaders understand what the data means and how to use it gives them the chance to come to a common understanding of the appropriate use of this data. And since they are all learning at once, it usually helps form a more open dialogue, rather than them having a fear of asking questions for fear of looking unaware.

Of course some executives are not going to look at or use this data themselves, but are rather going to look for a trusted analyst or other leaders in the organization to help them make sense of the data and determine what actions to take. It is important to know when this might be the case and to partner effectively with those trusted advisors.

Companies can also take the 'stick' approach to driving adoption should they choose. This involves for example mandating that new headcount requests or budget requests be accompanied by supporting workforce planning data, though these usually still require some of the other strategies articulated above.

The most important change management strategy in my experience is one that I have mentioned before - solve a critical business problem with real implications for the business and demand for workforce planning will flow very quickly. When trying to stand up a workforce planning capability, it is important to look for problems that lend themself to this type of analysis and focus on generating solutions that have real return for the business. Demonstrating those results and then using that as a lever to show the value to other decision makers is by far the most successful approach that I have seen.

Many of the traditional change management techniques such as training, communication, and involvement also apply to this type of change. But with workforce planning, you are trying to drive changes in thinking and behavior, so it usually requires a very focused change management approach. The techniques I've described are ones that have worked in many organizations, but it is still important to understand what your organization reacts best to and what really drives change in your specific company.

How Does Good Workforce Planning Change Decision Making?

I spend a lot of time on the blog talking about the fundamentals of workforce planning and how to set up a good workforce planning capability in organizations. Today I wanted to talk a bit more about what it looks like when you get there and how it changes your organization.

Having good workforce planning will change the way that your organization makes decisions. Because good workforce planning allows organizations to see "what might happen if", it tends to make people decisions more objective and more based on data. As with any data, there are uncertainties, but it changes the conversation from "I think we need this many people" to "if this scenario comes to pass we need this number of people with this type of skill". And if you have really good workforce planning, that would include "and here are our best options for acquiring those people".

Now that is fairly intuitive - what would be the point of having workforce planning if you weren't able to use data to make decisions? But what I have seen in organizations that have good workforce planning is more striking. Where this capability exists, I see companies move away from the typical knee jerk reactions of "We have to many people so lay some off" or "We don't have enough people so hire some". Workforce planning allows a more strategic reaction to scarcity or surplus and when one of those conditions appears, executives can ask questions such as how bad will it get or how long will it last and get data-driven answers. They can make more strategic decisions about what actions to take and tend to look at more alternatives. Some research that I was involved in during the current economic downturn showed that companies who had good workforce planning tended to lay off less and tended to recover faster. And while they may not know it was because of workforce planning, employees in those companies tended to see their employers as more strategic in terms of people actions.

I have also found that companies with good workforce planning tend to promote more from within. They have a better sense of their long-term needs and can actually develop their internal staff along those needs in time to make a difference. To go along with that, they tend to have better training & development programs because they know what the long-term needs are. So even in the case where the needed skills take a long time to develop, they have the runway needed because they have early warning of the needs.

A couple of things that I am also starting to see. Companies that have started to see their revenue turn around and are starting to see some growth are really benefitting from their workforce planning. They are ahead of the curve in terms of knowing what they need and are avoiding the trap of overhiring. I see most organization being fairly conservative in their hiring, but the discussions about who to hire and when are based on data and not instinct. In some cases they are making deliberate choices to underhire based on the uncertainty in demand, but they are still keeping an eye on employee workloads and making sure the staff is not overwhelmed. All-in-all there is just an increased level of discipline around human capital decisions. And I am also finding that managers no longer want to make big human capital decisions without the data. So they end up requesting special analysis from the workforce planners when faced with a new scenario.

Finally, I am finding that both Finance teams and executive teams begin to require objective data to approve hiring decisions. Many companies I work with have some sort of control gate now where if someone wants to hire (even a replacement), they need to show the case for why they need that position and what alternatives they have examined through workforce planning data. That level of discipline is certainly encouraging to someone who has seen too many organizations make bad people decisions!

Contingency Planning Revisited

Sorry for my absence from the blog. Lots of projects and lots of travel lately...

I wanted to talk a bit about workforce planning and the role it can play in contingency planning. I know have talked a little bit about this in the past. Lately I have been asked about modeling everything from the economic impact of new conflicts in the Middle East to the impact of potential labor actions on the ability to continue operations. While the workforce is not the only factor that plays into these scenarios, it is an important element.

To do effective contingency planning, it is important to have a baseline workforce plan for the current operations. This plan needs to be more that just straight line projections, however. You really need to have the full view of processes, skills, outputs, hours, etc. that I have discussed in the "Techniques That Make a Difference" posts. In a contingency situation, you need maximum flexibility from your workforce and you need to understand the potential for redeployment of resources. Not only who can be redeployed and to where based on their skills, but what things will not happen in the case of those redeployments (i. e. what won't get done) and what are the impacts of this on the organization's overall metrics. This data allows decision-makers to see what the ideal redeployment approach might be and how long it can be sustained. It also allows decision makers to plan for prolonged response needs such as what happened with Hurricane Katrina. In those cases, decision makers may want to examine potential rotations of response staff based both on evolving needs and on the need to rotate staff back to their normal jobs. For example, you may be able to redeploy procurement specialists to the response effort for several weeks, but past that point the normal responsibilities of the agency in this area are compromised. How long can the agency afford to shift those staff to the response effort for? Past a certain point, the agency may need to look at a contingent workforce to either relieve those in the response zone or to cover its day-to-day work while the response effort continues. Good workforce planning can tell decision makers which option is the right one based on cost, efficiency, etc.

But to be clear, I am not just talking about some kind of natural disaster. There are a number of potential events for which a company might want to have this type of plan including:

- Labor Dispute / Action
- Supply Disruption
- Economic Crisis
- Pandemic or other Health-Related Event
- Power Outage
- Terrorist Attack

This is just a brief list - there are many potential issues. For global businesses they have to look at the potential for disruption in one country and how you might use your workforce from elsewhere to respond. And certainly the events of the past year alone illustrate the potential. Just look at the long-term impact that the Japanese earthquake has had on their economy and on the global supply of a number of goods.

Another facet that needs to be considered in this type of model is the potential for staff or contingent labor to be unavailable. Not necessarily because they are injured or such, but they could potentially be without transportation or something could have happened to their home / family that makes them unable to get to work or work a normal schedule. Your contingent labor could be in a similar situation. So what will your plans be if 10% of your workforce is unavailable? 20%? 30%? How would you redeploy resources and what would be impacted? How long could you survive? Will you need to deploy financial or other resources to assist your workers?

Yet another factor to analyze is the impact of stress, etc. on the productivity of your workers. As we have discussed before, if there is a reduction in productivity, you can't assume the same level of output from your existing workforce. How will that impact your performance and what resources will you deploy to address this? Will prolonged work in responding to a disruption further reduce the productivity of your workers and what impact will that have? How do you mitigate these dynamics?

Certainly this type of planning is among the most complex and it involves a lot of judgment calls. There are numerous variables to consider and many unknowns. It also requires a thoughtful approach to determining what kinds of disruptions an organization can potentially face and what the appropriate responses are. I mentioned some of these above but each business needs to look at its operations and locations to determine the potential issues. But the value that come from being able to perform and respond when others can't is tremendous. And even the fact that the organization has a plan that is deliberate and communicated helps reduce the stress in the event of a disruption and helps the people respond more effectively.

That is not to say that organizations have not just "made it work" in terms of their response strategies in terms of some sort of disruption like a natural disaster or a labor dispute. But in my experience, the toll on the organization both in terms of its performance and its people goes well beyond the disruption itself. Having a plan helps ensure that the organization maximizes its ability to respond while minimizing the damage done to its operations and its people.
Brian E. Wilkerson
Revolution Advisors
(303) 926-5278
bwilkerson@revolution-advisors.com